Thursday, March 15, 2018

Trading log begin--Post 1, 3-15-18, fail

Preface: I have historically enjoyed excellent success with momentum and mean-reversion trades having fundamentals in their favor, as well (perhaps that is what gave me the confidence), locked-in positions have also been important--so I couldn't bail on short-term contrary moves. I have never been good at trading per se. Even worse than taking profit. I am endeavoring to remedy this, and improve my trading acumen. It is said that trade logs are extremely important to see what is holding one up. So, I begin.

Trade 1: missed (blue arrow). I also used a 3m chart, would probably not have noticed the formation on this 1m chart. I noticed price ceasing to decline and what looked to be a rounding bottom pattern. I did expect the rounding bottom pattern to continue for longer than it did, however, and thus wasn't exactly in a hurry to place a trade. Additionally, I noticed that while the pattern did occur after an extended decline, we were in post-market hours, where the odds of less-than-straightforward price action are significantly lower. Obsessed with getting a good price (such that I could have tight stops)--really, I would be trading 0.5 one ES contract during this learning phase, but do not have this option. Must trade a full lot. Or paper trade--which I have done rather successfully. As such I decided the time had come to use real funds in this endeavor. Obsessed with getting a good price I did the analysis paralysis then placed my orders at the then low, '45. By that time it was too late (I expected to have more time) Anyway, immediately after the burst of activity away from formation, I canceled orders and closed charts.

Trade 2: -$75 Coming back, to my surprise, price had exploded (still pre-market) and was edging down. I did not consider shorting for this reason, but price was retreating in an orderly fashion inside what I identified with excitement as a bull flag (on the 1 minute chart...yes) I then identified levels of S&R where I had high confidence price would reverse, expecting to get into said flag before breakout to upside. Price simply, although appearing to halt the decline halfway between my entry and stop, made one more downward thrust, with volume actually coming in this time. For this trade, I certainly should have waited for the thrust/volume on the downside then entered. However, with price over-extended we can see the trade wasn't a good one. In fact, not worthwhile taking. I honestly would have passed initially but I saw the 1m bull flag formation (a fantasy of my own making apparently) AND I HAD JUST MISSED A GOOD TRADE AND WAS 'HORNY'


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