NCLH Trade on Feb 28, 2023 11:48 from Maarten: Tradervue User Stock Trades.

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Maarten

 

Review the signals that led you to identify the trade opportunity SETUP? Screenshot the chart BEFORE and DURING it was setting up. Add notes.

NCLH
-Weak catalyst: earnings miss and loss.
-Strong bearish drive: 1.8ATR action.
-Solid technicals: sold through 50SMA on elevated volume, clear succesfull break & no retest.
-High elevated volume.
-Has had big trend days right below the 50SMA before.
-Shallow volume indicating a trend.

-How successful were you in identifying the market environment and playbook variables during the trading session?

Setup
Did well noticing the weakness of the setup. But I should do a better job on stating the checks in my favor.
I should have put more emphasis on the large volume at LOD. This is a check that’s not in my favor. Although the overall setup was still quite solid.
I also overvalued the shallow volume. There were a couple of volume bars that did below average volume, but in hindsight I wouldn’t call it shallow volume that indicated a trend. That came later.

Price action: nonvolatile ranging/trending & consolidation.
I called out the initial retracement looked more like sideways price action. It was in fact a consolidation with an offer that held well at .64. I should have done a better job recognizing this price action. It wasn’t a clean trend and I should be more aware of this.
Cue’s:
-A lot of inside candles: price wasn’t moving much.
- Volume wasn’t shallow while this was happening.
- Consolidation with clear higher lows. If anything the patten looks more like a failed wedge breakout.

Concluding
This wasn’t a PB pattern with orderly, trending price action. Sometimes the 5m chart can show some sideways price action when the PB bottom is forming, but this price action occurred immediately after LOD. I would say I didn’t do a good job on recognizing this. I shouldn’t have traded this setup.
The retracement that followed was a perfect example of the PB I would have liked to see:
-Shallow volume.
-Lower high.
-Clear trending price action, no inside candles but a proper price swing.

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?

The ideal entry was on the first proper PB that occurred after I had stopped out. It would have been at 14.65. But entering for a 5m LL given at 14.64 was also a good entry.
My entries were both decent. They were both after shallow volume and on the second I fought for price and got a 21% entry. I should do this more often. If I know I am going to get in, then I should enter as close to my risk as possible. This minimizes my losses.

What was the optimal trade management strategy, in order to minimize risk when wrong or maximize gain when right? How does that compare to your trade management strategy? What signals (if any) did the market provide for moving the stop to breakeven, or beyond?

Great first exit
I have concluded that I need to capitalize more on price swings. This was for me a trade2hold, given that after my second entry NCLH was trending. I took off a partial of 40% as I wanted to hold a core for a new LOD. This is the right size and the exit was also solid I took profit after clear weakish price swing. Cue’s.
-Breakdown 9EMA and hold.
-Larger red candles.
-Extension from 9EMA.
I sold at .53 when
-there were strong bids at .50 that were unable to get tested.
-Price went sideways for a while.
I could have waited for a 5m new high for extra confirmation but in the end it was a good exit near the bottom of the swing.

Shouldn’t have sold my core
Then I moved my stop and sold after the break of the 20EMA. In hindsight this wasn’t a good exit. This is a trade2hold and I want to capitalize on a down trend. NCLH is still trending:
-Shallow volume
-Lower high is still true.
-First high was also above the 20EMA. So this wasn’t really a CHOCH.

New ideal trade management style
Also I have just locked in 1.7R * 40% = 0.69R. If I am sticking to my original stop then I have basically scratched the trade with 0.09R. I have scratched a trade that didn’t work and I am in the drivers seat. I have generated some cashflow and I have the opportunity to add back to full size. When I add and adjust my stop. I am risking a small loss now if the trade doesn't work after the add.
With this type of trade management eventually I would have been stopped out on my core since the trade idea failed, but I could still have made over 2R using this trade management.

Trade idea: 5/10
Trade management: 7/10.
Scratched a trade that didn’t work out. Next time I should make money on the same setup.


Execution detail:

Date/time Symbol Side Price Position
2023-02-28 11:48:01 NCLH sell $14.600 short
2023-02-28 11:51:33 NCLH buy $14.650 0
2023-02-28 12:02:11 NCLH sell $14.650 short
2023-02-28 12:43:26 NCLH buy $14.530 short
2023-02-28 13:07:16 NCLH buy $14.620 0


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