Looking back now, I bought in when the longest time frame momentum have alrdy dried and has alrdy turned pre-market. The middle TF momentum has already turned and is AGAINST ME. The shortest TF has turned to the upside and is indicating a "SHORT-TERM" change in momentum. Not knowing the significance of how important the bigger TF's are. I entered the chart early not realizing the bigger TF are against me.
1 Minute TF - MACD shows possible bounce. White arrows show where I entered/exited.
5 Minute TF - MACD shows I'm entering a trade AGAINST the bigger TF. I'm too early. I was up for a few secs but got whipsawed fast d/t the huge influence of the bigger downtrend. White arrows show where I entered/exited.
This is exactly how NEOT went as well.
1) Entered a non-Go-To-Setup.
2) Traded AGAINST the trend.
But the biggest mistake here was "NOT CUTTING LOSSES QUICKLY".
The 3 red lines were 3 mental stop losses that I should've taken into account prior to trading or did take into account but I froze and did not cut the loss. What could've bn just a 100$ loss, 160$ loss, 300$ loss turned into a 386$ loss in roughly 3mins and 20secs. Worst single trade of my year.
My takeaways from here is:
1) Trade WITH the trend. This is MUCH MUCH more important once I swap to shorting.
2) When cutting losses, use price action and stop loss points instead of the indicators since they lag behind price action.
3) When taking profits, use indicators instead of price action to prevent from taking profits too quickly.
4) Cut losses quickly bruh....
DAY TRADING PROGRESS
Momentum Trading -
I need to make sure what side of the trade i'm on and what the overall general trend is on the Daily/5Min/1Min TF. Momentum is what will tell me if the trade is tradeable or not.
Indicators -
MACD
RSI
HEIKEN AISHI DIFF
9 EMA/13 EMA
* I've ditched the Ichimoku Cloud for now since I can actually approximately visualize the calculations of the cloud WITHOUT having the cloud on. My focus is on measuring the strength of the momentum of the NOW moment.
* I've ditched the Ichimoku Cloud for now since I can actually approximately visualize the calculations of the cloud WITHOUT having the cloud on. My focus is on measuring the strength of the momentum of the NOW moment.
I need to be careful in not using too many indicators and hold more weight to where the trend is vs what the indicators are saying. Too much noise with too many indicators and I end up freezing. MOMENTUM is where it's at. Indicators will help me find my entry on shorts as well as help me spot profit taking spots/exit points.
On Profits -
When I pick a Go-To-Setup, I have an edge and profits usually come in naturally. My biggest problem is profit-taking. I had a problem with it initially but thankfully after learning from superman, systematically taking profits keeps me afloat.
On Losses -
I constantly find myself hoping that the stock will rebounce when i'm in horrible setups. Not cutting losses quickly enough is stacking large overall losses.
Revenge trading has been the culprit for my #2, #4 largest losses i've had thus far.
Fix: Have a system in place to re-assess myself once i'm done with a trade.
Zombie trading has been my #1, #3 largest loss so far. Both times it was similar to a Go-To-Setup BUT it was alrdy overextended and I entered when the trade WAS already against me.
Fix: MOMENTUM is your friend yet I went against it both times. There are multiples trends and I need to make sure that i'm trading with the overall general trend.
** Random Thoughts **
Last week after that loss, I started to distract myself with Forex Trading. At the beginning, it looks very similar to stocks but the Forex market is vastly different and I can see no edge for me thus far. There's alot of good vids on youtube but there's also alot of possibly fake/marketing vids that promote making alot of money on a short period of time but is not very transparent on their losses. At first, I really thought I can split my focus due to having an anticipated future slow progress on stocks. But after today's trade and review of my previous trades. I've made a significant learning experience and reaffirms my belief in only focusing on one thing at a time and MASTER IT !! I don't need to be good in a whole lot of things trading wise, I just need to focus on ONE thing and trade it VERY WELL. I feel like i've grown alot since this started and been refining my trading. I will be opening up a 2nd account on E-Trade and slowly dip into the waters of "Shorting".
| Total Trades | 20 | 20 | 0 |
| Percent Profitable | 35% | 35% | 0% |
| Winning Trades | 7 | 7 | 0 |
| Losing Trades | 13 | 13 | 0 |
| Avg Trade Net Profit | $2.88 | $2.88 | �M |
| Avg Winning Trade | $259.67 | $259.67 | $0.00 |
| Avg % Gain | 11.39% | 11.39% | 0% |
| Avg Losing Trade | $135.39 | $135.39 | $0.00 |
| Avg % Loss | 5.17% | 5.17% | 0% |
| Ratio Avg Win to Avg Loss | 1.92 | 1.92 | 0 |
| Largest Winning Trade | $636.19 | $636.19 | $0.00 |
| Largest Losing Trade | $386.07 | $386.07 | $0.00 |
| Largest Winner as % Gross Profit | 35% | 35% | 0% |
| Largest Loser as % Gross Loss | 21.93% | 21.93% | 0% |
| Max Consec Winning Trades | 2 | 2 | 0 |
| Max Consec Losing Trades | 5 | 5 | 0 |
1st thing to work towards profitability: (Based on Priority)
1) I'm only 35% correct on my trades. I NEED to make sure I'm only choosing high probability setups. It's insane that I am WRONG x2 as much as I am RIGHT yet still profitable as off today. Trading LESS is MORE. ( I think when I was paper trading last year June/July, my ratio was more like 6 winning trades to 30ish losing trades in one day trying to scalp.. so much much better)
2) I've been doing good in the beginning of the year as far as cutting losses to my mental stops, Now that I'm focusing more towards the beginning of the day where it's much more volatile and at a shorted period of time. I NEED to be able to cut losses quicker shown by my loss on AKAO.
3) Learn how to read Price Action better. I've put too much emphasis on lagging indicators and not enough on reading what's going on AT THE MOMENT.
Shit overdue:
KNOW my Go-To-Setups and create Flash cards for them so I know what setup i'm trading.
Rate the trade prior to the setup and only trade GOOD setups / ONLY Go-To-Setups for now.
BOOKS:
The Daily Trading Coach by Brett N. Steenbarger
The Disciplined Trader by Mark Douglas
Trading in the Zone by Mark Douglas
Market Wizards by Jack D. Schwager
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The Power of Habit by Charles Duhigg
*Recommended by Lt.Col. Resch* Really Good but too long and boring imo.
The 7 Habits of Highly effective people by Stephen R. Covey
The 4-hour workweek: Escape 9-5 by Timothy Ferriss
The Buttefly Effect: How your life matters by Andy Andrews
*Recommended by Lt.Col. Resch but I personally didn't like it. I liked Benjamin Franklin's "For The Want of a Nail" story better*
KEEP MOVING FORWARD !!
Integrity and Excellence in all I do...
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