Trading when you are not feeling that well is certainly not going to put you 'in the zone' but I still decided that since I had been ill all week I would still do this. Naturally, the results I am sharing from my losing trades are expected.
This particular trade did meet my entry criteria for the loosely titled '3 bar play' strategy which is when there is a gap up or down when the high or low of that first candle is taken out by the 3rd or 4th candle a trade should be entered.
I did enter the short trade which continued to the downside but then price action reversed and ripped back to the upside to tag the previous close of the prior day before then resuming to the downside.
I am going to tweak my rules so that a short trade can only be entered if the opening candle is a red candle ie pure bearish and the opposite for a long trade.
The green box was a pre market zone of the Fab 4 capturing 20 and 200 period moving averages and lowest and highest prices. Pre market I could see that the price was looking to break out of this range and I was poised for a possible entry.
I ended up taking 2 trades here. The first trade got stopped out by a whisker and when it looked like price was going to rip again I entered again. The price action ended up making a triple top before then completely reversing. A double top statistically, maybe price can recover but if price makes a triple top the odds are against that it will break that price area again.
I marked on the chart where I should have exited the trade (at a profit) but I was away from my trading station and therefore the stop loss was eventually triggered.
The problem here is that neither of these Exxon trades were in my rules because the most important criteria was that the opening candle was a bullish elephant bar. It clearly wasn't it was an acorn bearish bar. I was too keen to trade. See the trading results below.
This is a horrific way to lose your capital because they all add up and reduce your win rate and your capital. I show all my losing trades and I think for many I am managing to learn from them and tweak trading rules but I need to have full charge of my emotions. I need to love trading less because the desire to trade is sometimes too strong for me.
Trade Clearly!
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