Trading Journal 6/1
Another losing day
The after-hours action was a strong uptrend. GEX was around 2.9, so the day was expected to be very tradable. Going into the open, the up-trend had broken, and bounced strongly and was heading into the top of the band with steady action.
It looked pretty primed for a breakout. And it started to breakout and immediately trend upwards at open. My plan of watching the action and trying to read the market first rather than predict it, was helpful for this open.
Because suddenly weirdly the action started faltering, which is a great sign to fade the open, because if you can’t maintain a bullish trend during the strongest buying part of the day, odds are good things are bearish.
I waited for confirmation of it coming off the top rail and entered at the break of the MA as it started to break down.
Then I made a mistake. When it bounced off the bottom, I figured it might be a chop-trend, but this is the morning where things move fast. So I closed early, and then it immediately bounced off the middle average and went into downtrend.
Trade 1: Waiting Perfect, Read Market Perfect, Great entry, Poor exit (didn’t let the trade play out for long enough).
Trade 2: I decided to take on more risk, realizing my exit was premature, the downtrend looked strong, and I just joined it. I don’t know if this qualifies as a “hop on trade”, but the strength of the downtrend was strong/apple was dumping, and I felt good about a higher risk. I closed when the action appeared to weaken.
Trade 3: The action was weakening. I took it as a sign to go long. That was a mistake. On a higher time frame it’s clearly still a downtrend. It hasn’t broken, or entered chop or entered uptrend. I think this mistake was basically because I’ve been trying to take the most of the market instead of being very selective in what trades I choose. It’s not the worst trade, it’s just a little too much low probability, and I’d be better off waiting for additional confirmation (NOPE signal/or approach high NOPE), or a flat/chop region, a definite break in the downtrend.
I took a bunch of other trades attempting to trade a bounce/retracement/at too fine grain a level. The 100 tick chart is great for entries, but for understanding the larger picture/trends/directional bias, you need the 1 minute chart. Basically the short part of the story, is that I bailed too early on my good morning trades. And then I hit a period of going from trend to choppish on 100 tick chart which was poorly traded. But on the one minute I would have been way better off simply holding my good morning trade(s) through.
I ended up losing all my gains and then some for the day. And mostly got killed by commissions.
My new plan is to:
For now I’m going to go back to futures options for a bit, maybe just for a little bit. I’ve been learning a lot on the futures delta one, especially about great entry points, but my tendency to over-trade every little movement simply is killing me. Something as simple as buying/selling after I get a good risk/return and have read the market at open, and closing the position when NOPE signals would probably be a winning strategy on days when volatility isn’t insanely compressed.
- Try to make a morning direction trade.
- Then make up to two NOPE signal trade(s).
I think this will be a lot cleaner than what I’m doing now. I’m simply making too many trades. And if you think about it, while NOPE signals doesn’t necessarily predict a magnitude of reversion, they generally will either call the top or signal the end of the significant trend from the open. So it seems like on a lot of days the bulk of the action could be gotten by getting the open correctly, and then exiting at a reversion (and playing that, which might or might not occur) .
