Thunder dome

[Adam Lewis 64]

February Trading Review

Statty stats

I finished February with a total R of +22.5. I took a total of 68 trades on 18 trading days, an average of 3.8 trades per session. 31 were profitable trades (46%), 33 were losing trades (49%) with 4 recorded as break even (5%).

My average winner was 1.63R, my average loser was 0.85R.

The breakdown by strategy was as follows (LB = Lightning Bolt; MP = Mountain Pass):

The average win and loss size by strategy measured in Rs was as follows:

I either have a short bias, or simply that this month more short sets ups presented themselves (I do suspect I have a short bias, however, and feel more comfortable taking short positions):

Analysis

I need to relearn my ABCDs. A 37% win rate is not sustainable, even if ABCDs also delivered the best win rate by R size. One major goal for March is to take fewer trades, but better positions. I still think I have a tendency to over-trade. Beginning to focus on when an ABCD is an ABCD will help.

My favourite strategy is the mountain pass. I find these entries the easiest to spot. A 58% win rate is very good and I hope will continue to grow as I continue to practice. An average R return of 1.84 on the winners is great.

I need to relearn the lightning bolt strategy. I am becoming too eager when I see a stock trend and arrive at VWAP to take an LB, and I end up taking many sub-optimal positions.

Unsurprisingly, I won only one of four trades with 'no strategy' and this was for only 1R. However this is not a problem - to now be down to only 4 out of 68 positions without strategy is a massive improvement on where I was a few months ago. More below.

Overall, I'm doing much better keeping losing trades tight, and coming off losing positions when they're not going my way. Fixed risk hot keys have changed my game here, but even then I think I'm good at seeing a trade not moving my way or beginning to range, and then coming out early if I no longer have confidence of resolution. This is how I've kept my average losers below 1R, and I want to continue to do this.

January and February goals review

My overarching goals for January and February were around trading discipline. I came into the new year feeling I was a very undisciplined trader, prone to chasing entries, following chatroom call outs and not always having clear reasons for going into trades. I also wanted to work on risk management, which in January was a chronically neglected area of my trading.

I'm pleased to say I am coming out of February having made progress in all of these areas. My trading is now much more disciplined and much more strategic. The fixed risk hot keys have helped me completely nail down risk management, and I now never enter a trade without a hard stop. It turns out setting a stop is an entire skill in and of itself. More below.

At the same time, strategic discipline is going to be something I'll always have to work on. I have made very good progress, but I have a lot left to do, and I always will. 

Goals for March

My goals for March are as follows:

1. Take higher quality entries. This seems self evident, but I am still at times too fast to take trades. I need to take fewer positions but better positions. I want to begin to get my win % above 50%.
2. Set more conservative stop losses. I often set stops too tight, and I am stopped out before a trade moves my way. This likely comes from wanting to allow myself the R:R to get out with a win sooner, also then due to a history of being used to trades resolving in 2 or 3 minutes. I've had winners this month where I walked away with +3R but it took 10 or 11 minutes to get there, and it felt like a lifetime! I need to learn that it isn't a lifetime at all, and setting more conservative stops and also then allowing a trade longer to resolve will help.
3. Continue to develop strategic discipline. As above, this will take time, and it will be a long and ongoing task. Right now I have three core strategies: the ABCD, the mountain pass and the lightning bolt. I don't want to add new strategies to this trade book until I have understood these positions better. If I am trading these positions then in any session for 45 minutes after the open there will be several possible entries. I don't need more strategies than this!

Overall: I am the happiest I have ever been with my trading, but I remain aware there is a lot to do. Progress is hard to see up close, but step back and I am doing well. 

[Michael Sanchez 53]

On 2/27/2021 at 10:20 PM, Adam Lewis said:

February Trading Review

Statty stats

I finished February with a total R of +22.5. I took a total of 68 trades on 18 trading days, an average of 3.8 trades per session. 31 were profitable trades (46%), 33 were losing trades (49%) with 4 recorded as break even (5%).

My average winner was 1.63R, my average loser was 0.85R.

The breakdown by strategy was as follows (LB = Lightning Bolt; MP = Mountain Pass):

The average win and loss size by strategy measured in Rs was as follows:

I either have a short bias, or simply that this month more short sets ups presented themselves (I do suspect I have a short bias, however, and feel more comfortable taking short positions):

Analysis

I need to relearn my ABCDs. A 37% win rate is not sustainable, even if ABCDs also delivered the best win rate by R size. One major goal for March is to take fewer trades, but better positions. I still think I have a tendency to over-trade. Beginning to focus on when an ABCD is an ABCD will help.

My favourite strategy is the mountain pass. I find these entries the easiest to spot. A 58% win rate is very good and I hope will continue to grow as I continue to practice. An average R return of 1.84 on the winners is great.

I need to relearn the lightning bolt strategy. I am becoming too eager when I see a stock trend and arrive at VWAP to take an LB, and I end up taking many sub-optimal positions.

Unsurprisingly, I won only one of four trades with 'no strategy' and this was for only 1R. However this is not a problem - to now be down to only 4 out of 68 positions without strategy is a massive improvement on where I was a few months ago. More below.

Overall, I'm doing much better keeping losing trades tight, and coming off losing positions when they're not going my way. Fixed risk hot keys have changed my game here, but even then I think I'm good at seeing a trade not moving my way or beginning to range, and then coming out early if I no longer have confidence of resolution. This is how I've kept my average losers below 1R, and I want to continue to do this.

January and February goals review

My overarching goals for January and February were around trading discipline. I came into the new year feeling I was a very undisciplined trader, prone to chasing entries, following chatroom call outs and not always having clear reasons for going into trades. I also wanted to work on risk management, which in January was a chronically neglected area of my trading.

I'm pleased to say I am coming out of February having made progress in all of these areas. My trading is now much more disciplined and much more strategic. The fixed risk hot keys have helped me completely nail down risk management, and I now never enter a trade without a hard stop. It turns out setting a stop is an entire skill in and of itself. More below.

At the same time, strategic discipline is going to be something I'll always have to work on. I have made very good progress, but I have a lot left to do, and I always will. 

Goals for March

My goals for March are as follows:

1. Take higher quality entries. This seems self evident, but I am still at times too fast to take trades. I need to take fewer positions but better positions. I want to begin to get my win % above 50%.
2. Set more conservative stop losses. I often set stops too tight, and I am stopped out before a trade moves my way. This likely comes from wanting to allow myself the R:R to get out with a win sooner, also then due to a history of being used to trades resolving in 2 or 3 minutes. I've had winners this month where I walked away with +3R but it took 10 or 11 minutes to get there, and it felt like a lifetime! I need to learn that it isn't a lifetime at all, and setting more conservative stops and also then allowing a trade longer to resolve will help.
3. Continue to develop strategic discipline. As above, this will take time, and it will be a long and ongoing task. Right now I have three core strategies: the ABCD, the mountain pass and the lightning bolt. I don't want to add new strategies to this trade book until I have understood these positions better. If I am trading these positions then in any session for 45 minutes after the open there will be several possible entries. I don't need more strategies than this!

Overall: I am the happiest I have ever been with my trading, but I remain aware there is a lot to do. Progress is hard to see up close, but step back and I am doing well. 

Great stuff man!!! This is really motivating to see. You have been making remarkable progress dude!!!

[Adam Lewis 64]

Any feedback on this one chaps? This was a failed ABCD short on AAPL. I saw it break down out of its opening range and then recover to VWAP. It rejected VWAP and then fell back below the 9EMA, which was my entry point with a stop back above VWAP. The stock ended up continuing on up and I stopped out. I'm wondering which (if any) of the following statements are true:

• You win some, you lose some. Nothing wrong with this entry, it just didn't go my way.
• I shouldn't be taking ABCD entries in the zone around VWAP, given the uncertainty that exists there.
• I shouldn't be taking these entries inside 15 minutes of the open: ABCD is a trend trading strategy, you could argue trends take quite some time longer than this to form.
• The ABCD entry itself was defective or invalid in a way I don't yet appreciate.
• None of the above.

Open to ideas! 

[Adam Lewis 64]

16 hours ago, Michael Sanchez said:

Great stuff man!!! This is really motivating to see. You have been making remarkable progress dude!!!

Cheers Michael. So much still to do...

For the trades you've posted here. I like the second one more than the first! I'm becoming aware of taking trades around VWAP (I assume the big blue line is VWAP). Peter on his lightning bolt webinar says he never takes a trade the first time a stock pushes through VWAP. Your second trade is actually a sort of lightning bolt which seems to have made a lot more sense. Unlucky not getting out with partials on it, but it moved in your way and at least it was the right call.

The first trade - if it's just broken VWAP then you're at an inflection point I think, things become uncertain. I don't think your stop was too tight - you've just got a bit of a late entry. I wonder how much the spread caused how low that red arrow is? Sometimes I'll enter thinking I'm getting a great entry but then I don't notice the spread and it dumps the arrow waaaay down the candle.

[Michael Sanchez 53]

On 3/2/2021 at 2:29 AM, Adam Lewis said:

Any feedback on this one chaps? This was a failed ABCD short on AAPL. I saw it break down out of its opening range and then recover to VWAP. It rejected VWAP and then fell back below the 9EMA, which was my entry point with a stop back above VWAP. The stock ended up continuing on up and I stopped out. I'm wondering which (if any) of the following statements are true:

• You win some, you lose some. Nothing wrong with this entry, it just didn't go my way.
• I shouldn't be taking ABCD entries in the zone around VWAP, given the uncertainty that exists there.
• I shouldn't be taking these entries inside 15 minutes of the open: ABCD is a trend trading strategy, you could argue trends take quite some time longer than this to form.
• The ABCD entry itself was defective or invalid in a way I don't yet appreciate.
• None of the above.

Open to ideas! 

Great analysis Adam. The only thing I did not like about the trade was the 2nd candle on the 5 minute chart. However, I liked your entry. The fact that the price action was bouncing off of the VWAP would have made me believe that this was a short. This was not a bad trade at all, the only contradiction would have been the doji candle. In these circumstances I would have probably looked at the SPY to get a better sense of direction. 

[Michael Sanchez 53]

[JS 10]

On 3/2/2021 at 5:29 AM, Adam Lewis said:

Any feedback on this one chaps? This was a failed ABCD short on AAPL. I saw it break down out of its opening range and then recover to VWAP. It rejected VWAP and then fell back below the 9EMA, which was my entry point with a stop back above VWAP. The stock ended up continuing on up and I stopped out. I'm wondering which (if any) of the following statements are true:

• You win some, you lose some. Nothing wrong with this entry, it just didn't go my way.
• I shouldn't be taking ABCD entries in the zone around VWAP, given the uncertainty that exists there.
• I shouldn't be taking these entries inside 15 minutes of the open: ABCD is a trend trading strategy, you could argue trends take quite some time longer than this to form.
• The ABCD entry itself was defective or invalid in a way I don't yet appreciate.
• None of the above.

Open to ideas! 

Hi Adam,

Long time lurker of this thread. I think this is a good entry if it fits your thesis and things just happen. 

However, for me, I probably would wait until it makes a new 1 min low for the entry. In addition, I am not sure if you use 2 min chart, it does not look very well for a short on it. Just my 2 cents.

Keep at the good work. 

 

[Adam Lewis 64]

6 hours ago, JS said:

I am not sure if you use 2 min chart, it does not look very well for a short on it.

I see what you mean! I'm having trouble finding set ups that align across all of my charts at the moment. For example, another trade I took on TRXC in today's session, another ABCD short that I came off break even (entries shown on the 1 min chart on the left, referring to the trade on the right  hand side of the chart, ignore the entries in the middle which was an earlier trade). It looked like a nice set up on the 5 minute chart (on the right hand side), but for an ABCD to set up on a five minute chart with a good pull back, that by definition is then going to leave a stock on the 1-min chart above the 9EMA and on a 15 minute chart showing a long tail / hammer candle.  

[Adam Lewis 64]

Stock: NCLH

Result: +1.5R profit 

Strategy: Lightning bolt

Long/Short: Short

Why did you take the trade?: Having seen NCLH drop to VWAP and then sort of dead cat bounce I was watching for a break below VWAP which would set up the lightning bolt. It did break below VWAP and I took my entry short with a stop back above VWAP.

What happened next?: The price continued to fall below VWAP. I took 50% partial at 2R (so 1R banked), and then took the rest out after seeing the price recover. The second partial is probably coming off it too early, you've potentially still got an ABCD short setting up for the second partial but I wasn't feeling the price action. It was also late in the session and I had things I needed to go do, so I figured just come off it, bank and shut down for the day.

How did you feel after taking the trade?: Quite pleased, obviously! I'm pleased I was patient waiting for my entry. At the same time a little disappointed that the stock didn't continue to sell off below VWAP. After my first partial I was really expecting a continued sell off, no support levels to bounce off, clean black space to drop into. It didn't happen (after this picture this price actually sprung back up above VWAP!)

What did you do well?:  Waited for my entry.

What can you improve on?: I guess being more patient waiting for later partials to develop.

[Michael Sanchez 53]

On 3/3/2021 at 3:50 PM, Adam Lewis said:

Stock: NCLH

Result: +1.5R profit 

Strategy: Lightning bolt

Long/Short: Short

Why did you take the trade?: Having seen NCLH drop to VWAP and then sort of dead cat bounce I was watching for a break below VWAP which would set up the lightning bolt. It did break below VWAP and I took my entry short with a stop back above VWAP.

What happened next?: The price continued to fall below VWAP. I took 50% partial at 2R (so 1R banked), and then took the rest out after seeing the price recover. The second partial is probably coming off it too early, you've potentially still got an ABCD short setting up for the second partial but I wasn't feeling the price action. It was also late in the session and I had things I needed to go do, so I figured just come off it, bank and shut down for the day.

How did you feel after taking the trade?: Quite pleased, obviously! I'm pleased I was patient waiting for my entry. At the same time a little disappointed that the stock didn't continue to sell off below VWAP. After my first partial I was really expecting a continued sell off, no support levels to bounce off, clean black space to drop into. It didn't happen (after this picture this price actually sprung back up above VWAP!)

What did you do well?:  Waited for my entry.

What can you improve on?: I guess being more patient waiting for later partials to develop.

Love this trade man!!! I can see how patient you were by your entry.  Entry was beautiful, partial was amazing, along with your exit.

[Michael Sanchez 53]

Psychology: It was a tough day!! Too many opportunities I was not expecting it to be honest with you. I felt rushed and overwhelmed like a kid in a candy store. But my take aways are use the 2 min chart more often, trust myself, and remember the basics. 

[Michael Sanchez 53]

On 3/3/2021 at 9:26 AM, JS said:

Hi Adam,

Long time lurker of this thread. I think this is a good entry if it fits your thesis and things just happen. 

However, for me, I probably would wait until it makes a new 1 min low for the entry. In addition, I am not sure if you use 2 min chart, it does not look very well for a short on it. Just my 2 cents.

Keep at the good work. 

 

Great stuff man! I agree with you 100%. When the going gets tough I always look at the 2min chart for a better perspective of the price action! You should post some trades as well. We would love to learn more from you!

[Adam Lewis 64]

2 hours ago, Michael Sanchez said:

I always look at the 2min chart for a better perspective of the price action

This is something I want to experiment with. Right now I have 1 min, 5 min, 15 min and daily on a 2x2 grid. They all play a part, but starting to wonder if I should have 1, 2 and 5 full size then half space for the less-commonly useful daily and 15 min.

[Adam Lewis 64]

4 hours ago, Michael Sanchez said:

Too many opportunities I was not expecting it to be honest with you. I felt rushed and overwhelmed like a kid in a candy store. But my take aways are use the 2 min chart more often, trust myself, and remember the basics. 

Superb work on that first NCLH trade! Where was your stop? The problem for me getting in at the break of a range is I'm never sure where the stop goes. 50% back up into the range seems about right but not sure.

[Adam Lewis 64]

Stock: NIO

Result: -1R loss

Strategy: ABCD

Long/Short: Long

Why did you take the trade?: NIO looked really strong and made a great open. I waited for a pull back and then after seeing it hold 9EMA on the 1 min took an entry with a stop back below the 9EMA.

What happened next?: The price fell and I was stopped out. NIO rolled over from here and sold off heavily along with the rest of the market.

How did you feel after taking the trade?: Quite calm, but still with this feeling that I really suck at ABCD patterns. There is a big wick right before my entry - should that resistance have put me off? I'm interested if others can see reasons to not take this trade that I didn't see at the time. 

What did you do well?:  I can't think of much. Used a stop, set enough room for it to work. 

What can you improve on?: ABCD patterns in-totum.