Maher - Journal

[maher 0]

== Averaging Down ==

MU was weak today. on a reversal, it rejected the VWAP twice before my first entry.

To seek a good entry I entered long before I saw a confirmation that it broke the VWAP.

My first entry was with a half my normal position size. I got stopped out.

Second entry also with same position size, but rather than stopping out, I kept adding, it even broke the moving averages and I kept adding. Eventually I decided to bail on it with a great loss.

I kept thinking now it will break out, and the market gave me all the signals that I was more likely to be wrong, but instead I was stubborn and paid the price.

After that point, I did some revenge trading on MU which only increased my losses.

 

The other lesson I learned here is that even if I wanted to get a good entry for break of the VWAP, I should have bought at some support (like MAs) rather than at resistance (VWAP). My losses would have been smaller. Both entries were right at VWAP.

 

Dear community members, don't do what I did. Hopefully I learned my lesson.

Edited June 20, 2019 by maher

[Abiel 474]

Been there, done that. Unfortunately seems like we all need to make this mistake to understand to cut our losses short. The problem is, merely "knowing" we have to accept losses in this business is not enough to comply with the rule. 

[maher 0]

Thanks for your comment Abiel. Yeah, I couldn't agree more. This was an example of violating several rules that I "know".

[BBT Member 001 27]

I took that trade before you. Trading reversals is tough especially at VWAP.

I got stopped out also.

See below:

You nailed it, get in at MA support, not vwap, also go long when it crossed vwap holds it and pulls back.

 

[BBT Member 001 27]

volume is also low. 

It was not an awful trade, just not either 1) your/my edge 2) textbook setup.

These trades have lower probability of going well as vwap is a very important determinator to if the stock will be green or red for the day

[maher 0]

Yeah, the entry was bad but adding below the MAs on a 4th red candle was particularly bad..live to trade another day and learn I guess.

Damn MU got both of us today

You did much better than me though, it rejected the VWAP just once before you entered. I was so focused on the MAs and breaking the VWAP, I didn't even notice that VWAP was rejected twice. Amazing!

And you respected your stop-loss. 

Thank you very much for sharing your trade and comments with me.