Thunder dome

[MattfromNZ 55]

As it says in the image, this is my best trade to date. ABCD patterns inside an ABCD pattern. The 3rd add did not work out, But I still came away with $106.95 from $20 Risk.

[Adam Lewis 64]

5 hours ago, MattfromNZ said:

As it says in the image, this is my best trade to date. ABCD patterns inside an ABCD pattern. The 3rd add did not work out, But I still came away with $106.95 from $20 Risk.

Nothing to add other than well done! What a wonderful piece of work!!! 

[Adam Lewis 64]

Stock: GME

Result: +2R profit.

Strategy: Fallen angel

Why did you take the trade?: The set up presented itself and all of my criteria were met: a stock gapping up strong pre-market (actually breaking new all time highs right before the open), and then selling off strongly for a few minutes on the open, finding support at daily and / or premarket levels. After seeing the flush find a support level I took an entry at 39.84 with a stop below the level of 39.60.  I don't think my entry was great, the big wick below it giving me jitters. I can do better finding entries, a little FOMO probably drove me to take the trade at that point. 

What happened next?: I nearly stopped out. The stock fell back right onto that support level and hovered there. I had my finger on the sell button ready to get out. Luckily (not a good word to use!) it didn't and the trade went my way. I took a 50% partial at 1R then 50% more at VWAP VWAP, holding the final 25% of my entry, which I sold back at break even. The stock went on to surge higher and make entirely new ATHs as you'll see from the second picture. However I'm comfortable with stopping out where I did. 

Long/Short: Long

Entry: 39.84

Risk: 24c

S/L: 39.60

How did you feel after taking the trade?: A little bit stressed. Watching the stock tickle around the support level like that left me feeling anxious. 

What did you do well?:  Partialed out well, both taking profit at logical points and also the final exit which followed a rule for stopping out break-even on trades where you've already taken profitable partials. Waited until I recognised my strategy before entering the trade.

What can you improve on?: I wasn't happy with the entry, slightly more patience is needed. My mentality / psychology wasn't great and it made me hesitant to trade on after this point (I didn't - one and done). I was carrying over bruises from a hulk day on Friday last week, and this likely also made me want to just finish with a comfortable green day. I felt like I rode my luck here. 

Questions?: Nothing right now. 

[MattfromNZ 55]

12 hours ago, Adam Lewis said:

Stock: GME

Result: +2R profit.

Strategy: Fallen angel

Why did you take the trade?: The set up presented itself and all of my criteria were met: a stock gapping up strong pre-market (actually breaking new all time highs right before the open), and then selling off strongly for a few minutes on the open, finding support at daily and / or premarket levels. After seeing the flush find a support level I took an entry at 39.84 with a stop below the level of 39.60.  I don't think my entry was great, the big wick below it giving me jitters. I can do better finding entries, a little FOMO probably drove me to take the trade at that point. 

What happened next?: I nearly stopped out. The stock fell back right onto that support level and hovered there. I had my finger on the sell button ready to get out. Luckily (not a good word to use!) it didn't and the trade went my way. I took a 50% partial at 1R then 50% more at VWAP VWAP, holding the final 25% of my entry, which I sold back at break even. The stock went on to surge higher and make entirely new ATHs as you'll see from the second picture. However I'm comfortable with stopping out where I did. 

I think most people would have stopped out where you did at break even, that's what I've been doing once I've taken a partial. If your entry had been lower you would have been able to ride that little pullback out, but considering where you entered seems like you managed the trade well. I'm a bit confused how you made 2R profit with a 50% partial at 1R, then a 25% partial slightly above that, what am I missing?

[Michael Sanchez 53]

17 hours ago, Adam Lewis said:

Questions?: Nothing right now

Adam, your entries continue to impress me man. Great work!!!!

[Michael Sanchez 53]

REVENGE TRADE OF THE DAY

Hey guys I just wanted to shine a little light on what happened to me today. So I initially took XPEV because it was setting up for an ABCD pattern. This was not an A+ setup by any means and I should have stayed away from it from the get-go. However, when I got into the 1st trade I was able to reach 2R. My stop -loss and R/R was not great, which was another error. I decided not to get out but i hesitated and ended up getting stopped out. Well I was extremely frustrated and tried to go back into the trade and I promptly stopped myself out. I then took the trade again  in hopes that the stock would move up. I then got stopped out.  Moral of the story take a deep breath when a trade does not go your way and move on. This trade was a total loss of 1.4R. 

What would you guys do to prevent yourselves from overtrading?

Also was the RCI trying to me something the whole time?

 

[Adam Lewis 64]

16 hours ago, MattfromNZ said:

I think most people would have stopped out where you did at break even, that's what I've been doing once I've taken a partial. If your entry had been lower you would have been able to ride that little pullback out, but considering where you entered seems like you managed the trade well. I'm a bit confused how you made 2R profit with a 50% partial at 1R, then a 25% partial slightly above that, what am I missing?

I think I'm giving rough estimates for the Rs, not totally accurate! I have an R of about $10 (so I tend to set a stop $10 below entry). I'll aim at a first partial around $15 green usually. I think the exact P/L on this trade was something like $17.80 profit (net of commissions) so it's like 1.8R instead of 2R, first R was likely taken out around $12. They're not precise Rs for this reason. Given the speed this strategy moves at, I don't always have time to figure out an exact stop, so I tend to use my P/L as a guide to help.  

[Adam Lewis 64]

2 hours ago, Michael Sanchez said:

This was not an A+ setup by any means and I should have stayed away from it from the get-go.

I'm not sure it was that bad. It's an ABCD set up and having already tested VWAP and found it as support you've got a good reason to enter a position here. The initial move up to 2R looks pretty solid to me. Sure the stop is a little extended, but the initial entry wasn't so great.

2 hours ago, Michael Sanchez said:

What would you guys do to prevent yourselves from overtrading?

I'm not sure there is a magic formula, I'm afraid to say. I think time, experience and patience will get you there. Keep learning, reflect and do better next time. That's all we can do. Take comfort from the fact that your initial entry was very good (it really was) and really only bad luck kept you from cashing in. 

[Adam Lewis 64]

Stock: DKNG

Result: Basically break even after 2 entries.

Strategy: Fallen angel

Why did you take the trade?: The first trade I took because I saw the stock plunge then bounce off a support level and became convinced it was about to pop right back up. My FA criteria were met, at least. I didn't want it to go without me so I jumped in. This was FOMO in absolute bags, and the first entry was terrible, leaving me with a dreadful R:R.

What happened next?: I stopped out as the price fell back towards the support level. I had to stop out. I shouldn't have been in from the beginning. I waited and saw the price hold support, and after seeing a triple bottom I went back in. My second trade was better and made back the loss from the first.

How did you feel after taking the trade?: I don't remember exactly, but I'm sure it wasn't so great. I sort of remember being aware that I wasn't fully in control of what I was doing. Strange sensation.

What did you do well?:  Stopped out first time. Waited and went back in second time with a better entry.

What can you improve on?:  Accepting that sometimes I'm going to see these trades and they're going to go without me. I also need to begin to develop strategies for later in the session. My mindset right now is, 'the FA only happens at the open, so better get in or you might miss it and not trade at all!' - this is obviously not a healthy mindset. Having a plan for later in the session will make me happier to miss out on these earlier trades.

[Adam Lewis 64]

(at the risk of descending into ever deeper pits of self loathing...)

Stock: NIO

Result: -1R loss

Strategy: Fallen angel... but a really bad fallen angel. Not really an angel at all, and also by this point no longer falling. More like an angel who fell out the sky, bounced several times unconvincingly on the road and then got run over by a car. I'm not sure I can call this a fallen angel, that doesn't do justice to the otherwise valid fallen angel strategy. 

Long/Short: Long

Why did you take the trade?: I guess I saw the set up. But there isn't a set up here. Maybe an ABCD to the short side. There is little else to say other than this is a terrible entry and an example of very poor trading. Look at those wicks on the two candles to the left. Clearly showing failed attempts to bounce up. This was an excellent short entry. So what was I thinking???

What happened next?: The price fell back sharply and I stopped out.

How did you feel after taking the trade?: Extremely unhappy.

What did you do well?:  Erm...? There is literally nothing. Stopping out? Sure. Stopping out. I stopped out well. 

What can you improve on?: Just not going near trades like this. I mean for goodness sake. 

[MattfromNZ 55]

7 hours ago, Adam Lewis said:

I think I'm giving rough estimates for the Rs, not totally accurate! I have an R of about $10 (so I tend to set a stop $10 below entry). I'll aim at a first partial around $15 green usually. I think the exact P/L on this trade was something like $17.80 profit (net of commissions) so it's like 1.8R instead of 2R, first R was likely taken out around $12. They're not precise Rs for this reason. Given the speed this strategy moves at, I don't always have time to figure out an exact stop, so I tend to use my P/L as a guide to help.  

Ok, that makes sense. I have been using my P/L  to determine when I make partials, cause otherwise its easy to take them in the wrong place. So cause my risk is $20 I have been waiting until my unrealized is $40 before I take a partial. Once my first partial is in, it is easier to visualize where your R's are.

[Adam Lewis 64]

 

3 minutes ago, MattfromNZ said:

Ok, that makes sense. I have been using my P/L  to determine when I make partials, cause otherwise its easy to take them in the wrong place. So cause my risk is $20 I have been waiting until my unrealized is $40 before I take a partial. Once my first partial is in, it is easier to visualize where your R's are.

I take the same approach almost through simplicity if nothing else, and will let the P/L guide me. Is there any school of thought on whether this is a good idea or not? So much of my trading seems to be trying to simplify things to create mental space to make decisions, this is one of those things I guess.

[MattfromNZ 55]

10 hours ago, Michael Sanchez said:

REVENGE TRADE OF THE DAY

Hey guys I just wanted to shine a little light on what happened to me today. So I initially took XPEV because it was setting up for an ABCD pattern. This was not an A+ setup by any means and I should have stayed away from it from the get-go. However, when I got into the 1st trade I was able to reach 2R. My stop -loss and R/R was not great, which was another error. I decided not to get out but i hesitated and ended up getting stopped out. Well I was extremely frustrated and tried to go back into the trade and I promptly stopped myself out. I then took the trade again  in hopes that the stock would move up. I then got stopped out.  Moral of the story take a deep breath when a trade does not go your way and move on. This trade was a total loss of 1.4R. 

What would you guys do to prevent yourselves from overtrading?

Also was the RCI trying to me something the whole time?

 

I agree with Adam that your initial trade isn't too bad. Price rejected VWAP and you waited for confirmation before jumping in. Stopping out at break even was probably your first mistake, once you re-entered it put you in a worse position. Obviously you got nervous and bailed, and if you had stopped trading here it wouldn't have been too bad. Now from the info I have, it seems that the price could easily gone your way on this one, it was definitely looking like an ABCD, it just didn't work out. You escaped this one with only a 1.4R loss, I would kinda call that a win (cause you didn't get a 3R loss!). 

How to prevent this in the future? It seems that one of the main problems here was indecision. You didn't have conviction for whether you should be in the trade or not. This could maybe be solved by having some clearer rules and guidelines for entering and exiting ABCD trades. This is something that I struggle with for ABCDs cause they are very subjective and open to interpretation. They are touted as a good "Beginner strategy" but there is a lot of nuance to them and I think they are harder than other strategies to have clear guidelines. Also you could have a rule, like after 2 unsuccessful entries into a stock, you are not allowed another for the day.

[MattfromNZ 55]

19 minutes ago, Adam Lewis said:

 

I take the same approach almost through simplicity if nothing else, and will let the P/L guide me. Is there any school of thought on whether this is a good idea or not? So much of my trading seems to be trying to simplify things to create mental space to make decisions, this is one of those things I guess.

The only thing I can think of is that I heard that some traders hide their P/L for psychological reasons. I think this is more for all your trades, rather than the trade you are currently in though.

[MattfromNZ 55]

13 hours ago, Adam Lewis said:

Stock: DKNG

Result: Basically break even after 2 entries.

Strategy: Fallen angel

 

I think you did OK man, You managed to break even with your re-entry so that's awesome. I feel like the stock could have bounced back a lot more giving you more R's. For every trade I try to think "If the price had done the opposite of what it did, would I still feel the same about my decision to enter". As in, a good or bad entry shouldn't be judged by what happened afterwards.