QQQ Trade on Jun 4, 2021 10:20 from tjmiller2001: Tradervue User Stock Trades.

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tjmiller2001

 

QQQ opened strong for the first 30 minutes of trading and found resistance in a used 3 hour supply zone.

Since consolidation near the highs is bullish, I didn't want to get in until I saw confirmation of a downtrend.

I planned this trade at 10:09 with the idea that I wanted to see volume on the selloff to 334.60 to enter.

When I saw volume on the 10:19 and 10:20 red 1m candles, I got in with a 3:1 RR. I'm glad I was decisive with my entry. I choose to avoid the 0DTE contracts and instead trade 3DTE ITM contracts.

At 10:20 I wrote down: " My stop is a little wider than usual so this will be a bigger loss than usual if I get stopped out. I've accepted the extra risk that comes with the extra reward."

I waited for lots more confirmation on this trade than I tend to wait for. That meant that my stop was much further than usual from my entry. Although I was trading differently than usual, I believed that waiting for that amount of confirmation aligned with the SD strategy.

The trade quickly went against me but then rejected an area near my stop and headed back down to consolidate around 334.65.

At 10:27 I wrote: "Emotionally calm during trade, blocked out my account value in the top left. Accepted that this trade will either go my way or it won't"

I like that way of thinking. Even though my risk was high, I was setting myself up to avoid emotional decisions by blocking out how much I was up or down. Also, accepting that I couldn't control where QQQ went was helpful, there's no point in cheering it up or down, I've accepted I just need to react to what it does.

At 10:38 I wrote: "Still consolidating, moving closer to stop, sticking to plan until I'm stopped out, this is a strong level that has been rejected multiple times recently."

This is the tough part, was I not making a strong decision by holding the position after 334.60 held as support on the 1m chart? Or did I make the right decision by staying short right under a key resistance level on the 1 hour chart? It's tough to compare the selling strength from 10:17 to 10:20 to the selling weakness that kept price consolidating above 334.60 from 10:20 to 10:35. I think trading for longer will help me compare the two but there's likely something out there that I can learn right now that will help me. I'm not sure what that is. The best thing I can do is track my results, meticulously tag trades, then learn from that data.

In the future, I think it would be wise to exit a short position after you see consolidation under resistance followed by green 1m candles that approach the resistance level. Here, a 10:37 or 10:38 exit would've been appropriate.

At 10:41 I was stopped out by a break above 335 supply. I wrote: "Not too emotionally upset by a large loss, I followed a strategy that had an edge for me last month."

Lesson Learned: Keep my risk small while I am still learning this SD strategy. There will be plenty of time to risk more and make more once I prove that this strategy is profitable for me.


Execution detail:

Date/time Symbol Side Price Position
2021-06-04 10:20:56 7 JUN 21 335 PUT buy $1.710 long
2021-06-04 10:41:13 7 JUN 21 335 PUT sell $1.420 0


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