My losing trades of the day included a trade set up that was not part of my strategy. My winning trades for the day are posted separately.
The first trade was Exxon, explained below.
Learning from my previous trades I have consciously moved away from trading the 2 minute chart and decided that 5 minute chart would be my lowest time frame.
To give some context, on the daily time frame the price action had been bullish after a significant move up with no breather. For quite some time it has been pulling back. When price gapped up on market open it had been rejected. However, price retraced followed by a bullish candle to engulf the previous candle. This indicated that there was a chance the price drop had paused and was now about to move to upside and I therefore took the trade.
What I failed to notice was the fact that the price area, where the stock gapped up was at a previous pivot point and the first 3 candles of the day could not pierce this resistance. Had I seen this then I shouldn't have taken the trade. I hope to not this mistake again by factoring this step of looking to the left for pivot points into my rules for trading gaps.
On the positive side risk management rules were followed.
This was an attempted breakdown from a range but there were a few mistakes here:
shouldn't have been looking for short trades at a key support
Entry point wasn't really low enough for an entry anyway, was too risky
I used an order for this and filled in my absence but my rules require elephant bar
The key takeaway on this trade is that from now on I am not going to leave any trade orders because at point it fills it will likely always be part through the time frame candle. My rules require me to wait for a candle to close before I enter a trade.
Trade Clearly!
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