TTD Trade on Feb 15, 2023 14:42 from Maarten: Tradervue User Stock Trades.

TTD 15-2-23
Premarket
“Catalyst: Earnings beat (very small), 700 million share buyback program announced.
Setup: positive reaction 17%, about 3ATR gap up.
Technicals: LT trend is more neutral. Bounced of the 50SMA. ST is more bearish. On both time frames it’s in between bearish and neutral.
Pre volume buzz: 16.4%, that’s great.

Review the signals that led you to identify the trade opportunity?

Setup – Look at daily chart for more similar price action!
Share buyback program has a positive effect lately, the small earnings becomes less relevant.
Technicals are decent short term. Should have looked more at the daily chart; there are A LOT of big gap ups followed by strong green days. Also a lot of similar setup in that they bounced of the 50SMA. I noted that this 3ATR gap looked quite a lot, but it wasn’t in hindsight.
I would have graded it higher based of this info, probably a 8.5/10. I haven’t systematized the grading of the setups (yet). But a good question to ask myself would be: how could this setup be a 10/10?
ANSWER: A stronger beat or FY guidance.
What else?? Volume was amazing, technicals in hindsight couldn’t have been much better. After this answer, I perhaps should have graded it 9/10.

Intraday – EOD Trend (non-volatile)
-Extreme morning strength followed by a sell off to VWAP. The volume on this sell off wasn’t extreme at all.
-Clean bounce of VWAP with hammer candle. No consolidation.
-Reclaim of 20EMA on extremely shallow volume. (Trend indication)
-No significant closes below 9EMA.
- SPY was also more favorable: was clearly trending up.

What was the ideal entry point? How does that compare to your entry? What signals (if any) did the market provide, which could have led to an improved entry?

Poor entry
This is a clear nonvolatile trend. I decided to trade it when the first bounce of the 9EMA had already occurred. Perhaps it’s less clear when looking at the chart where to place my stop and risk. Those should be the same spot!
I decided to place my risk at 62.81 the low of the first ‘PB’. I wanted to get in on 63.10 with a a 30 cent stop. But was hesitating too much to get in and watching the tape. I already knew I was going to trade it and therefore I didn’t fight for price. Once I missed my entry I chased 11 cents higher.

IF I am not sure what the proper stop is in a nonvolatile trend, THEN I need to
1) Use my system to get the right entry.
2) Lower my risk at a level where I am definitely wrong. Be honest and don’t set it too low.
This will allow me to
1) Get a good entry.
2) Be more comfortable.
3) Am able to keep my loser smaller than 1R if necessary.

Was the initial stop location appropriate? Was it in accordance with your trading plan? Where, with the benefit of hindsight, should the stop have been placed? What signals (if any) did the market provide to identify that location?
My entry system would have told me to enter 63.08 with a stop at .98. Since the ideal stop wasn’t as clear to me given the type of price action, I liked setting a lower stop. A stop at .81 makes sense. When I get stopped out there, I know I am very likely to be wrong on the trade. I know this is something I like to do. I will likely stop out sooner for a smaller loss if the trade doesn’t go my way, and I won’t get stopped out unnecessary. It increases my win rate.
Good risk level!
Since I got a bad entry I put my stop higher at .91. Which was also fine. It was below the 20EMA and it was 9 cents below the prior low.

Entry vs risk level
I am getting bad entries by manually deciding my risk levels. Use the system to decide the entry price, and adjust the risk level if necessary! If I am placing my stops too low I am not accepting the risk fully. But I rather set my risk a little too conservative than get a bad entry!! Good entries and stops are part of making one good trade!!

What was the optimal exit location or locations, in order to minimize risk when wrong or maximize gain when right? How does this compare to your exit location? What signals (if any) did the market provide to identify this ideal exit location?

No proper exit plan
This was a trend trade. The idea was to ride the trend and not to sell unless there’s a reason2sell. This is a trade2hold!For this specific I didn’t really have prespecified ATR target because I didn’t expect it to break HOD. But that’s BS. I should have measured the high of the PB, which was 2.26 ATR and set a target: 2.46ATR. That target would have been 63.89.
I didn’t specify my core, I want this to be 60-80% of my position.
No predefined core target + no specified core target  random, emotional exits  underperformance.

Ideal exits
IF none of those reason2sell occur:
1) Significant close below/above 20EMA;
2) CHOCH  Take partial profit and trail core to BE;
3) ATR core target is reached;
4) Significant selling volume when long, or vice versa. Adjust stop to 9EMA.
THEN be patient and HOLD.

The core I should have sold at 63.89, which should have been a 4R target had I entered properly using my system.
Then the next reason2sell was at 15:40. Here I should trail up my stop along the 9EMA. But selling a partial here is perfectly fine.

Extreme strength and my random exits.
Suddenly price went from trending (nonvolatile) to extreme strength with high elevated volume. This caught me off guard and I decided to sell and not wait for a reason2sell.
My first sell was at what should have been my core target, I sold 42%. This was at 2.3R.
I sold 29% at about 4R and sold the remaining 29% at 5.4R.
Which got me 3.7R in total.

Conclusion
I made a decent profit but this wasn’t one good trade. I had a good thesis + setup in my playbook + seeing it. On this part I improved this week, this is the core. But I didn’t fight for price. Entries and exits were poor.
Fighting for price
I have developed a clear system for finding entries. If I think my stop is too tight, than I can lower that responsibly. Sometimes I need this to take a solid entry. It fits my trading style. But I need to hold myself accountable and make sure I am not doing it because I am scared of getting stopped out.
Exits system (also fighting for price)
Now I have 4 clear reasons2sell.
-Two of those (ATR and above average volume) are based of stats. I need to listen to those, the edge is great here! Violating these rules by taking profit earlier is one of the most stupidest things I can do.
-One is subjective and is meant for when I see a CHOCH in the trend before the trade has started fully working. I will sell a partial and adjust my core position to break even. After I do this there are 3 scenario’s:
1) When my gut instinct is right and the trade isn’t working, I will make a small amount of money.
2) When I was wrong and the trade keeps on working, I still have a core position that I can profit on. I will still capitalize on one good trade.
3) If I get stopped out and the setup sets up again or still is working, then I can get back in.
This will be a great exit rule. It will improve my performance.
- The last one is more subjective and something that I have observed. I got it from SMB trend traders. It’s a good rule. I know that most stocks trend along the 5m 20EMA. If it closes significantly below, I should be out.

Not yet
I had one good win and couldn’t help but think about the profit I would have made risking 25%, like I have done earlier. The truth is I am not ready yet. I can’t make one good trades properly yet, not even with 12.5% risk. There is no reason why I should trade bigger if I can’t trade very well with this size. Like Bella says: Not yet. Not yet. Not yet.
I have now outlined all steps specifically to do so. This is the next step I should be working on. One good trade isn’t about winning or losing, it’s about doing the work premarket and during the open and developing a thesis. It’s about game planning, and seeing the setup set up. Then it’s about fighting for price: good entries, with stops areas that make sense and give you a good RR. It ends with taking the appropriate exits.

I know where the focus should be now. Fuck the sizing. I have proved not to be ready for that. I should focus on making 5 one good trades in a row! In fact, every day I should focus on making one good trade the priority. Making one good trade is a WIN, and I need to develop a winning mindset, a wining habit. And to keep winning I have to work hard each day. I would like to end this review with a tweet from Mike Bellafiore:

“You will not trade great until you first trade just good.
You will not trade very well until you first have a few good days.

#OneGoodTrade
#intradaytrading”