Mistakes | 8.12.2021 | Thursday

  • Failed to consider the the greater market context before entering trade.

Overview: This was a fantastic trade & a fantastic day. The mistakes to be found were subtle enough, and not egregious, but nevertheless insights into further refinement. Additionally, I did not need the pain of a loss in order to root out these mistakes and learn from them, an indication of progress. The main mistake was failing to consider the context of the market, where the market is in terms of it’s trend. Considering SPX has been respecting the levels & analysis you’ve executed to a T, it’s reasonable to anticipate how it may move when it’s near crucial channels or levels, and extrapolate how it may affect the issue you’re trading. Ultimately each issue is it’s own market and you must respect the sentiment within each market, but being cognizant of the grander ecosystem is paramount to establishing yourself as a competent market participant. Do not neglect the significance of the bigger picture.


-Trade 1 Mistakes: Not considering the context of the overall market, which was beginning to sell off. The only mistake (if it can be called that) was trading what turned out to be the very top of a larger move. Not sure this can be helped. The greater trend was bullish. I could not have known beforehand how much further the trend would or would not go, and I traded cautiously on a small leg of the trend—exiting before a massive level—which was my plan & my goal. But this is to be considered, how can one determine if a larger move is ‘over extended’? Is there such a thing & is it possible to anticipate? For weeks now I’ve been watching moves play out, where I’m certain there’s no way they can keep running or dumping, and almost every time I’m proven wrong, and the ‘overextended’ trend extends even further. I’ve missed out on more money sitting out of moves for fear of them having reached their climax than I have lost on moves that I got in on a strong trend & got caught at the moment of reversal. The trend is your friend until it ends. Do not be deterred. The chances that you buy the exact climax of a move are less likely than getting in at some point in the middle, especially with the quick scalping strategy you’re employing. When you begin to trade on larger time frames you can revisit this potential issue.

-Trade 2 Mistakes: Could have had a limit order at a target set rather than a trailing limit but being that this was your trailing contract a trailing limit was reasonable.