Trade Setup Analysis for July 12, 2024

Key Points from Notes:

• Missed Opportunity: Long entry off the 8:30 data reaction was identified but not taken due to the position size calculator suggesting the stop loss was too far.
• Wake-Up Time: Waking up at 8:30 on the dot caused you to miss the potential long opportunity and affected your preparation for the 9:30 trading session.
• Market Context:
  • The H12 trend was still down, suggesting a continuation lower.
  • Weekly DOL far below indicated a potential downside target.
  • The bottom band of the VWAP was tested, suggesting a possible top to bottom band move.
• BLUE ZONE: The data reaction held the BLUE ZONE, indicating a possible shift in directional bias.
• VWAP Bands: Confluence of data release with the VWAP bands could strengthen the given signal.

Things Done Right:

1. Immediate Stop Losses: Took immediate stop losses on the M1 chart and used trail stops.

Things Done Wrong:

1. Overtrading: Took 5 trades total; should have walked away after 2 consecutive losses.
2. Going Against Data Reaction: Ignored the data release reaction, which held significant support levels.
3. Late Wake-Up: Did not wake up at least 1 hour before the major market data release.

Recommendations and Checklist

Recommendations:

1. Preparation:

   • Wake-Up Time: Wake up at least 1 hour before any major market data release to analyze premarket conditions and prepare for potential setups.
   • Data Impact: Always consider the impact of significant data releases on market direction.

2. Trade Management:

   • Stop Losses: Continue using immediate stop losses and trail stops but review the placement to ensure they are not too tight.
   • Limit Trades: Limit the number of trades to avoid overtrading. Consider stopping after 2 consecutive losses to reassess the strategy.

3. Market Context:

   • Trend Alignment: Ensure trades align with the dominant trend (H12 trend in this case).
   • BLUE ZONE Analysis: Pay attention to BLUE ZONES and their confluence with major levels like VWAP bands.

4. Review and Adapt:

   • Trade of the Day: Identify and review the best trade setup of the day to create a playbook strategy.
   • Emotional Discipline: Maintain emotional discipline and avoid revenge trading after consecutive losses.

Structured Checklist

Before Market Open:

1. Wake up at least 1 hour before any major data release.
2. Review and analyze the premarket session for potential setups.
3. Identify significant data releases and their potential impact.

Pre-Trade:

1. Confirm the dominant trend (H12, daily).
2. Check for confluence of BLUE ZONES with major support/resistance levels.
3. Evaluate the VWAP bands and their relationship with current price action.
4. Use the position size calculator to determine appropriate position size and stop loss levels.

During Trading:

1. Limit to a maximum of 2 trades if initial trades result in losses.
2. Use immediate stop losses and trail stops as needed.
3. Avoid overtrading and stick to the planned setups.

Post-Trade:

1. Review the day's trades and identify the "Trade of the Day."
2. Update the playbook with new setups and observations.
3. Reflect on emotional discipline and areas for improvement.

Playbook Strategy for July 12, 2024

• Pattern: 8:30 DATA, H12 Bearish Trend Reversal, VWAP Upperband Breakout (Upside)
• Setup: Look for long entries off the data reaction if the BLUE ZONE and VWAP upper band confluence holds.
• Entry Criteria: Enter long on M1 bullish variation signals if confluence levels are respected.
• Stop Loss: Place stop loss below the BLUE ZONE or significant support levels identified in the premarket analysis.
• Take Profit: Target VWAP upper band or significant resistance levels based on trend and market context.

Today was a losing day, I lost 5 trades in a row on tight M1 stoplosses. When I was evaluating the premarket session, I analyzed a scenario where I could have went long off the the 8:30 data reaction, but when I put it into my position size calculator, it was suggesting that the data reaction stoploss was too far from Premarket Open print, and the M1 LONG signal off of the Bearish to Bullish Variation.

I also woke up at 8:30 ONTHEDOT, so I decided to pass up on the potential long oppt. and just wait for the 9:30 trading session.

Anaylzing the move in hindsight, that long entry was the A+ setup for the day, and in the future I will have to incorporate the first big data drop for that trading session as the deciding factor for direction OTD.

There was a weekly DOL far below after the prior day Daily downtrend shift, suggestion that the WEEK DOL could be the next target, and around 8:30, the H12 trend was still down, as well as the H12 structure, indicating that the market should continue lower.

I also figured that around 8:49, since the bottom band of the VWAP was tested on the data release, that we could potentially see a TOP to BOTTOM band move since the technical upside target was reached within the range. And I thought that upon 9:30 open, we could see a flush down/hold at the bottom band/Long oppt scenario if we were unable to sweep the data lows, providing for a higher R/R and lower risk long from the bottom band if presented. 

Another thing to note, is the Blue ZONE that held from the data reaction. have seen consistency thus far with BLUE ZONES, which are DOL(BSL&SSL) areas, that are in sequence with major highs and lows across all timeframes/timelines

This type of DOL BLUE ZONE, happened prior, and I have noticed, act as a sufficient 'Line In The Sand' area. And when breached, they should usually break hard and provide a momentum increase of stop hunting. But when these areas are held, it usually means that the 'Line In The Sand' was held, and that the directional bias has been decided

Also, if the data release has a confluence with a TOP or BOTTOM VWAP band, it could likely have more strength in the givin signal

Overall, the deciding factor of todays trend was the DATA release, and it completely reversed the market trend which provided me with a bearish signal to go off of. Very tricky day.

Although my position size calculator suggested that the stoploss was too far, I think I could have still just taken the strength of the HOLD signal, and taken my chances. My size was still low, and I could have recuperated if it went against me. But that could definitely just be hindsight bias, because had the trade went against me, I would be writing that the PMH to premarket open print provided higher R/R, and would be typing the exact opposite here. It really feels like one of those days of inneviatble loss, where my only thing I could have done right today, is just take the 2 losses and walk.

(Things I Did Right)

- Taking my immediate stoplosses on the M1 chart, trailstopping from the time on entry

(Things I Did Wrong)

- Overtrading (I took 5 trades total, when I should have walked away from the computer after 2 losses in a row)

- Going against the Data Release Reaction HOLD of the Bottom VWAP Band, The Prior Day Low & 5 Day Low Draw On Liquidity HOLD, and the M1 Bearish to Bullish Variation indicating demand

- Not waking up at least 1 hour before major market data release