T Trade on Mar 9, 2021 14:02 from tjmiller2001: Tradervue User Stock Trades.

T was at resistance on the daily chart and was not showing the same strength it showed yesterday. I wanted to see buyers lose at a key level then enter short on a trade I could hold for days as it faded lower.

I was watching T struggle to hold support at the 30.00 level around 13:45 to 13:58 (10:45-10:58 on thinkorswim). I missed the short before the breakdown but entered a few minutes later once I had confirmation of the breakdown.

I got short at 29.95 with a SL at 30.02 and a TP of 29.74 on my first lot. That's a 3:1 RR.

However, this name was 1) At resistance on daily 2) Lost key 30.00 level 3) Relatively weak to SPY 4) Still close enough to get short with a tight stop, I decided to size up and add another short lot at 29.95 with a SL at 30.02 and a TP at 29. This gave me a 14:1 RR, which is one of the best I've ever had. There was so much working in my favor that I felt good sizing up here.

An uptrend led T back above 30, it lost that level for a few seconds, then back above it. I stayed patient near that 30 level around 11:15. I wasn't looking to panic sell on an uptick, I wanted to see use Level 2 to see strong buyers at 30.02 and 30.00 hold for time.

I was closely watching the Level 2, which I've never done before, and saw a larger bid than ask size around 30.00 then 30.01. This was a sign of strength that should've hinted at me to sell at least 1 contract but I was in denial, too attached to the position. Could've kept this loss smaller by selling a contract based on L2 when 30.00 had 3x higher bid size than 30.01 ask size.

Normally this kind of Level 2 strength would be a signal to get out of my short and get long. However, I chose not to get long because I don't like to intraday price action on T. It doesn't move cleanly enough to the upside.

I was slow to exit and this cost me a little extra, turned a $6 loss to a $10 loss. Instead of fishing for an extra dollar on exits, I need to just get out and then consider a reentry long or short.

This was the right trade to size up on, I'm proud of myself for doing that. With a 14:1 RR, I could be right less than 10% of the time and this trade would be profitable. That is, if I get out at my stop, not far above it.

Might have been appropriate to set my stop at 30 instead of 30.02 since a 30 reclaim was a meaningful signal. Price returning to a level it previously couldn't hold is a sign that strength is back. A tighter stop makes sense here. I could always reenter if 30.00 fails again.

Note: Use the OnDemand feature to see if the bid size was decreasing or ask size was increasing around the 10:59 break of key 30.00 support. I want to see what Level 2 looked like during this time. Review L2 from 11:13-11:18, pay attention to bid and ask size.

Lesson Learned: Continue to size up on the best opportunities, listen to Level 2 and get out when the narrative has changed.