Trading Journal #15
08:33 am: “Futures spike up after job numbers giving a nice follow through to yesterday reversal buy vs low and also our yesterday longs. It’s wise to trim gains and raise stops on rest. Don’t forget we are going into a 3-day weekend as the US stock market is closed on Monday.”
08:35 am: “Morning focus on tech to see if it holds the morning gap up and extends higher or fades to fill this morning gap. AAPL AMZN MSFT TSLA AMD some names to watch if they hold the morning print or not.”
Morning Trades: I started the day shorting AMZN PDD and GOOGL for gaps filling lower as I saw Semis and META fading fast out of the gate. I was able to get some nice cash flow on AMZN and GOOGL but PDD had to close it fast. My idea on PDD was filling the gaps lower but the stock didn’t make new lows and start pushing up, so I closed the short and focused on my biggest focus for the last 2 days: IWM Call 182. Why did I keep trading C182 for the last 2 days? Because the flow was going there, I looked for the best price possible. First 2 entries had to close as the market was still a bit volatile but on the 3rd entry, I got aggressive on big scalp and that paid nicely more than 150% for the day, so I’m very happy. Can it go for more? Sure it can, but for my risk management, stock is right now stuck going nowhere for the last 1.5hrs, so that’s killing premium and not for me. I took the gains and looked for the next one!
Losses review: When I saw I was wrong on PDD short, I just closed it avoiding a big loss there, so I’m happy with my decision as the stock skyrocketed to upside. I also took some paper cuts on IWM C182 on first 2 trades, but that’s ok as I was looking for better entries and on the 3rd entry, was able to get all my money back from early losses and actually made the money for the day, week and month, so I’m very happy!
Key Takeaways: It’s OK to be wrong… It’s NOT OK to be stubborn. If a trade starts going the opposite direction, you close the trade, re-evaluate your decision and either re-enter later at better prices OR move into the next trade!
Look Ahead: Market giving a nice 2-day bounce as yesterday we hit the most oversold Breadth reading since March 2020 on Covid bear market. We are still below very big levels, so I’m dealing with this as an oversold bounce for now…just to clear the oversold conditions. IF this move will go into a new bull trend, that only time and price will tell us, so for now I’m taking trades based on price action and options flow. Staying open minded for any possible scenario.