Many trades were taken today and I am pleased with many of the decisions that were made overall. I realise that I over traded. Two of these three losing trades were unfortunately taken outside of my trading plan but there were many that were taken within the plan that yielded a profit. See my profitable trades post for the details.
The entry for this trade had been taken before the candle had actually closed. Quite a shocking trade considering that each candle is maximum wait time of 2 minutes. The concept here was that there was that the second bar of the opening of the session was after a hammer candle.
As can be seen from the subsequent price action the price quickly reversed and I was stopped out of the trade. I deserved for this to be a losing trade and I am very glad it was a loser because of that. The most dangerous thing in trading is to get a large winner from a trade where the rules had not been strictly followed and/or you enter a trade where there is no clear trading strategy behind it.
This short trade on Tesla was another disaster. As evident, there was no candle close before I entered the trade, just like the prior Microstrategy trade. Further, the stop loss I used on this was about 4 times bigger than it should have been. This would have given me a huge loss had it triggered where it was moved to. I kept moving the stop loss as the trade was going against me, a cardinal sin of trading and one that I am not proud of.
Thankfully, the price action moved to the downside and I moved my stop loss down accordingly reducing my risk until the point where I was exited out of the trade for a very small loss. This could have been a disastrous trade.
Price action for this trade had managed to pierce the 200 period moving average and then it retraced just under it, in what was a general uptrend. On a closed candle of a bullish elephant bar off the moving average I entered the trade.
The price subsequently kept moving to the upside but eventually the bulls tired, reversed and stopped me out. The only good thing about this particular trade was the fact that the entry was correct as per my rules.
Trade Clearly!
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