Still not immune from dumb trading.

Stats were bearish for month end closing. Hence I shorted the market but unfortunately my timing was bad. While I was fiddling with my stop loss order around 60 pts area, YM just zoomed 300 points in 5 mins. That's more than yesterday's range! I'm not sure whether it's because of inflation numbers released an hour ago. Didn't make any sense but I'm not asking questions anymore. Since it felt very similar to erratic DAX move earlier, I concluded that it's likely to be month end related PA and hence I decided to wait for a pullback to get out. I was lucky to get out during a deep PB with lot less damage but still -130 pts is not fun.

Though I wanted to call it a day, I noticed big sizes selling the top and hence decided to bet on the shorts again. However, I got in at a much better price this time and reclaimed my earlier loss. Though I had to endure some MAE, I was not too worried as it was liquidity hunting to shake out weak shorts. In fact, it made me even more confidence of this mean reversion trade. I'm glad that it's not a revenge trade. Though I could have pushed my shorts aggressively, I realized that this sort of price action and environment with month end moves is not my strength and hence calling it a day. Be safe out there. Happy weekend.


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Weekly review.

Though my long term goal is to increase my daily risk tolerance to 2000 USD (and I was getting there), I noticed significant increase in vigilance when I shifted from MES to ES. I also struggled to scale in, which is 'the magic bullet' for long term success, in my humble opinion. Hence, I decided to focus on my execution for the last 2 weeks and went back to micros this week.

What have I achieved so far?

1. I'm no longer adding to my loser. This is huge for me. Massive really. Since I start with 1/4 size, it guarantees that my losers are going to be small compared to my winners.

2. Adding to winners, as soon as I get confirmation that my trade idea is working. i.e new swing high or low in my direction. My aim is to try and scale up max size before I consider taking partial profits.

3. Always, always focusing on 'I'm wrong' price level. I'm using hard stops almost 80% of the times now. It's 100% if I'm counter-trend, judged by EMA clouds. It lot less frequent if we are in a chop/range especially when I suspect liquidity hunting with low relative volume. Mental stop works better then.

4. Much less attention to targets or profits. I still think about key levels like Y-H or Y-L to scale out but usually they are quite far from my entry levels, often >70% daily ATR. Hence, it automatically forces me to think about the above 3 points first.

5. Finally, I'm hopeful when my position is in green and nervous when it's in red. I no longer pray for a V recovery when I'm in a losing trade.

I feel like my thinking has been 'flipped' the moment I started focusing a lot on managing my losers. I no longer look at my P&L intraday except when I'm in a losing position. This is to simply make sure that I'm only holding the micros, NOT mini or full size contract.