Trading Journal #1
Week started with red morning futures down after a crazy and insane short squeeze up last Friday. After such a strong move, it’s healthy to pause/fade to consolidate gains. PreMarket action was lower but not falling apart so overall action remained strong.
Morning Focus: I noticed TSLA premarket relative strength with price higher following our Friday C870. At the market open, I was looking if TSLA was holding the gap and go up what could bring some red-to-green moves. AMD AMZN and GOOGL were some of the names I was looking at premarket for possible trades. AMD had an inside day on Friday. AMZN and GOOGL had a great rally up on Friday after lunch, so basically looking for possible red-to-green and continuation up.
Our Trades: started with day going after AMD and AMZN calls as planned but momentum stalled as they shook the tree a little bit, so I locked the gains on those calls and tried some PUTs. Those shorts were also short-lived as there was not much selling pressure so I locked those 20% gains and got my focus back on the initial plan: AMD AMZN GOOGL Calls. After the first 1hr of trading, I started seeing some bottoming and slow dip buying so I got back into those AMD AMZN GOOGL calls and closed around lunch time as the market got back into choppy mode.
Losses review: I had good risk management by keeping my losses small during that choppy action.
Key Takeaways: Do not get chopped… After a big rally up as we had on Friday, let the market digest the move, fade and consolidate a little bit and only after that, look for entries following the morning trading plan.
Look Ahead: Market is very overbought, but overbought can remain overbought for longer so not much we can do about it. I keep looking for possible reversal sell signals and possible 1-2 days fades to retest 8/21MA but so far we have a big bid on this market as they keep buying every dip. AAPL TSLA IWM SPY QQQ have been very strong, so it’s hard to get very bearish with this kind of action. Keep riding the bull train while momentum last, by buying the dip and selling the rip