Nasdaq Intraday Review - Thursday 11 July 2024
I trade Nasdaq exclusively
Trading in GMT time zone
Sharing my post day review and analysis in case it can help you!
Did my analysis at +- 13h00 GMT
Economic news - CPI @ 13h30
Directional bias - BUY
This post is titled: CRASH AND BURN!!! :(
So I have runner's that are still in play from previously - roughly in the area of the bang emoji.
My plan for CPI was to keep my directional bias as a buy, but I only wanted to get in if price spiked down.
If price spiked upwards, I was happy for my runners to benefit.
I identified 2 areas of interest -
Area 1:
Pivot point + 1H 0.382 fib (drawn from swing low at A. to swing high at B.) + Consolidation triangle market pattern profit target (marked in orange lines.
Area 2:
4H 0.50 fib level + orange trend line + 4H EMA (at that time) + strong 4H S&R zone + 4H 0.618 fib level not to far below + D - 0.382 fib level not too far below.
I set a smaller position buy limit at Area 1 and a bigger position buy limit at Area 2.
At 13h30, the CPI data was released and came in below expectations.
Market spiked up, but bulls could not keep price afloat.
When the long wick appeared on the 1H TF, I recognized that bulls may be losing momentum.
I immediately removed my buy limit in Area 1 because it was too close to price in my opinion and I would rather enter manually in that zone if need be.
To my surprise, price dropped like a hot potato.
Welcome to Nasdaq trading! Haha! :)
I was still pretty confident in my Area 2 and so kept that buy limit, after all it was +-1'500 pips from where price was at that moment.
My order triggered and I was in with a buy.
But my overconfidence got the better of me. I was so confident in the strength of this zone and so confident in my expectation that price would at least bounce from here, that I never actually considered where my stop loss would be.
So I made a deadly mistake - I entered a trade without having a trade plan.
As price continued to fall, my mind started reeling and I had no clue what to do. My runner's were closing and I just couldn't think clearly.
EVENTUALLY I closed this position. But I closed it way too late and took a MUCH bigger loss that I would have if I had planned my trade.
I took a loss of +- 2'000 pips on a pretty big position.
Even just writing that feels ridiculous and I can't believe I let that happen, but my mind was reeling and the drop was happening fast.
My regret is not that I entered a buy (I am glad that I did because the area was super strong in my opinion).
My regret is that I entered without a proper trade plan.
To prevent this from ever happening again, I have added a new trading rule to my trading system:
If I enter a buy limit order, my SL is 500pips from entry, no matter what. Reason is that I only enter buy limits when I feel the area is strong and if price is able to move 500pips from that area of interest in the opposite direction to my expectation, then it means I got it wrong and I need to get out of the trade quick!
So learn from my costly mistake (and one that I don't normally make)....always plan your stop loss!
Once out, I knew I needed to wait for really strong confirmation before entering again. So no revenge trading for me!
Hope CPI went better for you! :)
Abbreviations:
TF = timeframe
TP = take profit
1H = 1 hour
4H = 4 hour
D = day
W = week
M = month
S&R = support & resistance
EMA = exponential moving average
SL = stop loss
Trading in GMT time zone
Sharing my post day review and analysis in case it can help you!
Did my analysis at +- 13h00 GMT
Economic news - CPI @ 13h30
Directional bias - BUY
This post is titled: CRASH AND BURN!!! :(
So I have runner's that are still in play from previously - roughly in the area of the bang emoji.
My plan for CPI was to keep my directional bias as a buy, but I only wanted to get in if price spiked down.
If price spiked upwards, I was happy for my runners to benefit.
I identified 2 areas of interest -
Area 1:
Pivot point + 1H 0.382 fib (drawn from swing low at A. to swing high at B.) + Consolidation triangle market pattern profit target (marked in orange lines.
Area 2:
4H 0.50 fib level + orange trend line + 4H EMA (at that time) + strong 4H S&R zone + 4H 0.618 fib level not to far below + D - 0.382 fib level not too far below.
I set a smaller position buy limit at Area 1 and a bigger position buy limit at Area 2.
At 13h30, the CPI data was released and came in below expectations.
Market spiked up, but bulls could not keep price afloat.
When the long wick appeared on the 1H TF, I recognized that bulls may be losing momentum.
I immediately removed my buy limit in Area 1 because it was too close to price in my opinion and I would rather enter manually in that zone if need be.
To my surprise, price dropped like a hot potato.
Welcome to Nasdaq trading! Haha! :)
I was still pretty confident in my Area 2 and so kept that buy limit, after all it was +-1'500 pips from where price was at that moment.
My order triggered and I was in with a buy.
But my overconfidence got the better of me. I was so confident in the strength of this zone and so confident in my expectation that price would at least bounce from here, that I never actually considered where my stop loss would be.
So I made a deadly mistake - I entered a trade without having a trade plan.
As price continued to fall, my mind started reeling and I had no clue what to do. My runner's were closing and I just couldn't think clearly.
EVENTUALLY I closed this position. But I closed it way too late and took a MUCH bigger loss that I would have if I had planned my trade.
I took a loss of +- 2'000 pips on a pretty big position.
Even just writing that feels ridiculous and I can't believe I let that happen, but my mind was reeling and the drop was happening fast.
My regret is not that I entered a buy (I am glad that I did because the area was super strong in my opinion).
My regret is that I entered without a proper trade plan.
To prevent this from ever happening again, I have added a new trading rule to my trading system:
If I enter a buy limit order, my SL is 500pips from entry, no matter what. Reason is that I only enter buy limits when I feel the area is strong and if price is able to move 500pips from that area of interest in the opposite direction to my expectation, then it means I got it wrong and I need to get out of the trade quick!
So learn from my costly mistake (and one that I don't normally make)....always plan your stop loss!
Once out, I knew I needed to wait for really strong confirmation before entering again. So no revenge trading for me!
Hope CPI went better for you! :)
Abbreviations:
TF = timeframe
TP = take profit
1H = 1 hour
4H = 4 hour
D = day
W = week
M = month
S&R = support & resistance
EMA = exponential moving average
SL = stop loss
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