Good evening. See highlighted comments on prep and compare to my late afternoon short. Blog Trading Plan Rules are to trade the prep. I had a very slow week with a limited amount of trades. This is very uncommon for my trading style but my stats are still very much inline.
I have a very interesting topic to cover this evening. Viewing the screen shot of my trades for the day will help you follow. Also, I have uploaded the raw video of the entire second trade today. It is 16 minutes long and shows everything (chart, order DOM, trade PNL).
I had one loser and one break even trade today (trading 1/2 Blog Trading Plan Size due to late Friday activity). In my view, they were both good setups. You have your setup and your management. Both need to be well executed to win.
I believe the management is more important than the setup. Since I like to grade my trades, I give the loser a B+ and the break even a D.
This may seem contrarian to you and maybe it is.
There is nothing I can do about the first trade. I hit the breakout and it did not work. The plan was followed. You do not win them all.
The second trade had management issues:
It hit it's first natural target; the bottom trend line of the symmetrical triangle. I did not have any contracts to scale out due to the late afternoon reduced position size so I held for the HOME RUN.
This is not a bad move. I premised that there was a good chance of an additional 4-6 points. I've said before I expect my targets to get hit.
The problem is that when the market pulled back up, I had my stop at break even. I got clipped out at the high tick.
It would have been ok to either take the 4.5 points and have a break even in after a 3 point excursion or go for the home run and risk a stop out after the 4.5 point excursion.
The market is about risk/reward. You cannot mix and match strategies. I did and got nothing.
Had I played it right, I would have either had 4 points or 5 points profit in this situation. You might be asking "what if you had a 4.5 point excursion and then a 3 point stop out". That would have been ok with me. That is what my risk was.
That might sound foreign to many of you. In my opinion, if you want to talk statistics, I burned a winning opportunity based on my plan. If it got stopped out without going anywhere, that is built in to my premise. If I took the appropriate action and made profits, that is built into my premise.
What I did was effectively create a bit of randomness via an unforced error. Hence the D for today.
It is just one trade and very insignificant to my overall sample but I put each trade under scrutiny. I will improve my skill even if I have to do it one trade at a time.
yes, you were seeing green on that short, but they say never short a dull mkt, ie a narrow range day.
ReplyDeleteI was aware of the constriction all day. I look for direction and risk/reward in my trades. The short was at my resistance area marked on prep with an initial 2/1 risk/reward ratio and the potential for 4/1 if it opened up. It was a very solid trade based on my plan. Just poor management with the weak break even after 4.5 point excursion. Being late in the day on Friday factored into that but that's why I was only betting 1 contract.
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