It was another wild and volatile day that yielded some good trading opportunities.
*Disclosure: My SPY trades are all Paper trades using the Esignal platform. I experiment with positions size and money management techniques.
I made 4 trades today, one loser and three winners. I was fooled in the morning and started the day with quite a large loss.
-> My bias was short heading into the open. Risk ladder was risk off everything was down and I was looking for a short entry after the opening few minutes.
-> Near reversal time (9:50am) I noticed a topping tail followed by some follow through on the next bar. I entered the short position with larger than normal position size (I have been slowly building up my share size)
-> The bar reversed and created a bottoming wick that caught the Bears myself included. Price then rallied with some decent volume and TICK made a new high of +900.
-> This signaled I was wrong and to get out of the way. I closed my position for a loss and needed to re-assess conditions.
-> Here’s an emotional tip: If you start with a loss particularly a large one :( be careful not to force trades to make the money back this could easily set up a disastrous day. Don’t REVENGE TRADE the market almost always wins. Stick to your plan and your trading rules.
-> In this case I determined the market was still risk off and looked for another more optimal entry for the short side. My goal was not to make back the earlier loss but to trade the next play better with smaller share size. The larger share size trade influenced my decision making despite it being a paper trade. Seeing large numbers in the red can make anyone skittish and not thinking objectively.
You can see my notes on the chart for my winners. There are some good tidbits of information there. I ended the day slightly to the good. My three winners had smaller position size but I did make up the early morning loss.
When you lose, don’t lose the lesson — Dalai Lama
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