My losing trades for today are all detailed below along with mistakes and/or improvements required. I did manage to have one winning trade that neutralised all these losses. This doesn't make me feel any better when some of these losses shouldn't have been incurred.
Trade 1 - Natural Gas
This trade was taken in the very early hours of the morning and was a breakout trade. See the screenshot for details of entry and stop loss.
Note the monitoring of a pennant pattern and a wait for a break. My thesis was that there had been a big move up and price was now consolidating in a classic looking pennant pattern. I did wait and entered on the breakout and placed a stop below the last pivot.
This 'breakout' trade did not follow some of my rules for entering the trade, which were:
Market direction on weekly time frame must be in line with direction of trade (price was in overall down trend)
Obvious volume spike (there wasn't)
Elephant candle (small candle on breakout)
Unfortunately to add to the errors I made the same mistake as I did the other day which was trade in a period of very low volume and therefore this ended up being a fakeout even if it did take a large number of hours before I would be stopped out. I have now adjusted my trade times where I am allowed to enter a Natural Gas trade between 1pm and 10pm UK time.
The other clear error was that I didn't check my checklist before entering.
Trade 2 - Silver
This is an example of a trade where it did fully meet my rules but it was still a low probability trade. See the entry details below. I was at work when I took this trade so in terms of categorising my results it is classed as a trade and a result attributable to not being in the zone.
The entry candle was entered after the price action had completely engulfed the prior candle with volume and the price was just at or close to the 20 period moving average. A number of boxes were ticked for this trade but was it really a good entry, ignoring the fact that the next candle was a bearish engulfing candle.
The issue with this trade was that the price had already had quite a good move up and these type of trades work better when the price action is coming in for a pull back into the moving average. As I said it wasn't wrong but I am going to change my entry criteria in my rules that this is only a valid trade if the bullish engulfing candle arises at a pullback into the moving average.
Trade 3 - Alibaba
This was another trade taken at work and therefore not taken when I was in the zone. In order to have any success long term this elimination of trading when not in the zone needs to be dealt with.
I entered this trade shortly after trading commenced. After price had attempted to move up with large bullish elephant bar the price was rejected with a shooting star candle. The entry point was on the break of the low of that bullish candle.
As you can see at the stop loss I was stopped out of the trade as price attempted to reverse. I had already left a bit of room but the stop loss could have been placed at the high of the bullish candle, which would have given the trade more breathing space.
The pull back to the upside was short lived and met a lot of resistance. The price was continuing to be bearish. I did enter again, this time you will have to see my winning trades blog post today.
The below shows the net losses from today's trading.
Trade Clearly!
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