Today was another pretty decent losing day. New record of biggest losing day by $1. A lot to learn still but the losses are helping me focus in on what I need to do to improve. Basically the main things are to not trust the level 2 at all, only focus on the best trades that you have good conviction in, and don't take the mediocre trades and also take the trades that you lose consistently on the short side and go long instead. It is funny seeing how easy it is hindsight. I have also started using spreadsheets to track my setups and whether or not for the trades I take if patience is good, if a breakeven stop is good, etc. I am also tracking what happens after a certain type of news is released.
ACAD: I had this on watch for a continued fade based on how it didn't bounce much yesterday. My plan was to see if it peaked the 28.20-.30 level from the day before. At the open it started to fade and then it looked like it was holding under vwap. I decided to try it on a vwap test as it was consolidating in that area. I did have a hunch that this could be one of the many, almost every, time that this ends up being a low and I short at the bottom of an incoming upward move. That is exactly what happened and I got out in the .40s. I knew at that point it wasn't going to work and it wasn't doing what I thought it would by holding vwap and giving it some extra room. I should have also drawn some potential support that it did hit from the day before as well. So all in all it was a bad trade for not drawing more support lines from the day before. While the trade could have worked it is either going to hold vwap very closely or it is a better long. From now on if I see a pattern like this, I will just go long when it goes back above vwap as almost every time it has been a good long as long as it looks like this. The level 2 made it seem like it was rejecting vwap at the time so I thought that added to the possibility of it working - WRONG! Also, the fade setup/pattern later in the day was really great and had I seen that and possibly waited for that that would have been a guarantee almost. So a few lessons here: 1. Disregard vwap at the open for these types of shorts (you know this but for this trade you did have some other resistance in your favor but it didn't look too clean). 2. Go long these vwap breaks 3. Be aware of more levels from day before 4. Look for the fade setup later in the day on names you are originally interested in shorting - usually they offer good fades after the morning push. Also note that if you get a short right at the open that is fine but to cover at least some and then all of it on a vwap break and possibly go long after that.
FINL: This had pretty bad earnings and guidance. The whole thing smelled like a fade. I was hoping for a short against $20 in the morning but when it opened I got the feeling that it would bust through that so I waited. There wasn't much in terms of resistance that could have been charted so I didn't want to just short randomly. I decided to wait to see if $20 would peak because there was a huge bidder there that kept absorbing shares so I wanted to see him get taken out and then if $20 peaked I would start in. That is exactly what happened and it went down then back up above $20 but I stayed in thinking it could just be getting people out. It did drop below $20 and it made a new low but was then quickly bought back up. I was going to add on the new low but decided against it due to the SSR and not wanting to chase an add at this poor spot. However, it started hanging around my average and eventually broke through $20 and hit my stop. I was up around 40 cents on my trade but really thought I could get $1 out of it at least but I was wrong. I knew it had a high short interest but it seemed odd that it was holding up the way it was. It didn't go down so much that shorts would cover so it was odd for sure. I don't regret this trade at all and it was a good trade on all accounts. The patience just didn't work I guess but I would have been more pissed if I had taken it off right away vs. being patient.
SGY: This was my fuckup for the day. I shorted at 11.55 because it looked like it was going to start to fade. I had a feeling it would and the small pattern it made got me thinking that while it looked like a breakout candidate and looked like it was going to higher, it would be one of those that just faded instead. Unfortunately I stopped out near the highs as it did push higher and I didn't want to be stuck in another squeeze if it did happen. Honestly while this happened to be near the top, in realtime it was the right move because you never know. As it stayed above vwap it wasn't really a short afterwards. However, afterwards it cracked vwap and consolidated under it. I knew it was going to fade more, I really did. But the volume sucked and I didn't want to be short something with that volume. But I forgot that once the sell is on then the volume starts to really kick in. So it would have been fine to short it. I was thinking about shorting it as it looked like it was going to go lower but didn't want to chase it down although it looked good. I did have the chance for a better entry as it first climbed a bit before getting rejected and then starting the real fade. By the time the real fade was on I hit my downside so couldn't do anything else with it. So lessons: 1. Perhaps give things more room like I could have given it to $12 (it sounds like hindsight but that is the next whole number). I think I would have preferred to stop out and try again if I wanted to. $12 was an interesting level from the day before. 2. These patterns usually take a bit longer to do what you want first so don't chase but wait for the better entry. 3. Even if something like this has low vol, it will have high vol later on if it does what you think.
NVDA: I drew the support and resistance lines from yesterday and knew I wanted to be long or short if it was above or below those lines and held. It started fading and I wasn't sure whether or not while it consolidated if it was a good entry or if I could get a better one. I probably could have scaled into it with two entries like I ended up doing later on and then add on pops on the way down. It stopped going down at a random spot but it kept wicking down and getting bought up. Sometimes it means something and sometimes it doesn't but taking half off here wouldn't have been a bad idea at least if you were short. What I did end up doing was short it at vwap half and then add half as it went to $105. My thought process was that if this was the day it was going to fade a bit then any pops up to $105 should be shorted. I didn't know if it would stop at vwap or $105 so that is why I scaled in. I ended up getting out where I added though because I didn't like the way it was acting and honestly adding at $105 while ok with the size I had just didn't seem right. It wasn't really doing what I thought it should, it bounced too much for it to fade more. In fact I should have went long as it had a nice pattern after it broke out from 104.50 for a move at least to $105. Lesson: Don't just put orders at vwap thinking it will stop there after you missed the fade move back down. It has to make sense and with the pattern mentioned above it just didn't make sense. Go long instead when you see a pattern like you did.
NKE: Just a potential scalp trade that I stopped out on. I thought it looked good for a potential fade after it was consolidating near the lows and looked like a bear flag. I put a tight stop thinking it should work relatively quickly but it just stopped me out. It went a bit lower but not to my target and then it reversed. It was a bad entry but I thought it would work right away so that is why I did it. Sometimes it works when it looks like it is about to do it and other times like SGY it needs to cycle through shorts first. But it didn't have much followthrough anyway. I guess the lesson here is to just miss the trade unless you get a better entry. I didn't have a take on earnings but the way it looked chart-wise it made it seem like it could fade more.
FDX: I didn't trade it in the morning but the big spray up and then stuff right back down and then big fade goes to show you anything is possible. I saw a nice ABCD pattern and the earnings could have gone either way for me so I went long and then added over resistance. I was in the money a but thought it could go higher and had offers up at various spots but was wrong as to how far it could go as it ended up coming back down under the whole number where I shorted it. I took the add off just to be safe. I then added more when the bid was really absorbing (I know no L2 but this was right at vwap with a good chart and the risk was 2 cents and I was out so it was worth it if it did end up working). It didn't end up working so I got out for a loss. While it was frustrating to see me be up on the trade nicely only to get out for a loss, I think it was overall good process.
Things to remember:
1. No l2 trades.
2. Focus on the best trades that you don't think "maybe it can work". If you can't see it right away then don't bother
3. Disregard vwap at the open for these types of shorts (you know this but
for this trade you did have some other resistance in your favor but it
didn't look too clean). Go long these vwap break.
4. Look for the fade setup later in the day on names you are originally
interested in shorting - usually they offer good fades after the morning
push
5. Give things more room.
6. Even for low vol, it can have volume when the fade/breakout actually happens.
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