What went wrong?

[mahamuni 5]

Hi,

Still in Sim, trying to learn and correct mistakes.

On 10/12/18 I did the following

1.       I bought $SQ at the mark (1^st mark) because it broke VWAP, but as it can be seen it did not work out.

2.       I bought $SQ again at the 2^nd mark because of ABCD pattern (on 1 min chart) but again it failed.

3.       On both of them there was a decent volume.  (Please see the chart below)

 

How can I prevent these kinds of mistakes?  What can I look for as a confirmation to see if it is a sustainable move or not?

TIA

Munish

 

 

 

[Jason H. 53]

My take: 

It broke VWAP on the 5 min, but the wicks shot below on the next candle so you didn't have any confirmation of a close above VWAP. Wait for confirmation of a candle opening an closing above VWAP for a sign of a reversal. I read that first chart from the massive drop in the first 5 minute that the ABCD you're seeing isn't there, it's upside down. So the marks where you bought would to me have signalled a potential to short, because it broke down hard at open, continued a downtrend, and pulled back to VWAP, but never confirmed a reversal. 

[Carlos M. 230]

Agree with Jason. 

Munish keep in mind that after it stalled around $72.60 it ran up to VWAP around $74.20 and a passed it, that's a big move. The play would have been buying around 9:50  for the run up to VWAP, After such a big move you need to expect a pull back. You got caught here cashing and buying the top. 

[Meirlandau10 13]

Can I please have an opinion on what I did wrong with my first trade here,on SQ? As far as what I saw, a break down to open and then a consolidation,therefore expecting another breakdown,like a reverse ABCD. And,did I have a stop loss too far,it was the 9ema on the 1-minute chart? I’m having a hard time diagnosing the problem(if there is one). Thanks in advance.

Edited October 16, 2018 by Meirlandau10

[Abiel 474]

2 hours ago, Meirlandau10 said:

Can I please have an opinion on what I did wrong with my first trade here,on SQ? As far as what I saw, a break down to open and then a consolidation,therefore expecting another breakdown,like a reverse ABCD. And,did I have a stop loss too far,it was the 9ema on the 1-minute chart? I’m having a hard time diagnosing the problem(if there is one). Thanks in advance.

 

Your entry was close to too many supports: 50MA was a support in 5 mins and 200MA was a support in 1 min. Also, I have a $75 level in 5 mins that acted as a support too. So, bad entry.

[Meirlandau10 13]

I see what you’re saying,very good point. As a new trader it is quite challenging to take in account so many things in real time,where you need to make a decision within seconds or less. Thanks Abiel for your feedback.

[Skye 28]

I think it helps to trade in the afternoon (eastern time) at first because you have time to think and see all of the different things you are looking for. The start is overwhelming until you have been doing this for a while.