Daily Report Card 05152020

15 May Daily Report Card 05152020

My week­ly goal

Only take trades when there are at least 4 con­flu­ences. Trade loca­tion. Mar­ket Pro­file. Price action con­fir­ma­tion. Fol­low hard entry and exit rules.

Good Pre-mar­ket routines

Good Ses­sion PECS

Good Trade selection

Good Trade Exe­cu­tion & Mgmt.

Good Risk Adjust­ed Returns

Yes Dai­ly review

Mup­pet meter (1 being best — 5 being worst): 1

Sum­ma­ry

• Lon­don opened below VA and range and IB range dropped below prev day low, no extension
• H4 QLo below so we might see buy­ers com­ing in
• Price below M30 LKC, but M5 show­ing a move away from VWAP and inside bar retrac­ing more than 50% indi­cat­ing pos­si­ble rever­sal here
• Pros for IB exten­sion BD:
  • price below PVAL, range and prev day low
  • H1 bear­ish engulf­ing out of consolidation
  • Price below H4 VWAP
  • C retrac­ing back into IB range but still ear­ly into it
• Cons for BD ie. poten­tial reversal
  • H1 Demand ZOI and H4 QLo and H1 LKC below with 1st test of level
  • C retrac­ing back into IB with weak sell­ing tail (only 2 TPOs) for now. Still ear­ly in the pro­file though.
  • price below H4 VWAP might look to retest VWAP
• A break upwards from IB could give the fol­low­ing options:
  • #1 Test of val­ue low as the most ide­al short trade loca­tion — best option giv­en bear­ish con­text on high­er timeframes
    • PVAL would coin­cide with H4 VWAP retest and new D1 Con­ter­mi­nous Sup­ply 1.40663 as well as hav­ing con­ges­tion from H1 sup­ply ZOI and M30 Sup­ply at PVAL makes for a lot of con­flu­ence to think of a rever­sal. Obvi­ous­ly would need price action to con­firm with poten­tial ses­sion range exhaustion
  • #2 Risky one — antic­i­pat­ing a short con­tin­u­a­tion from this M30 test of con­ter­mi­nous line and enter­ing on a bit of a guess (which is some­times accept­able when you’ve had a strong push right at the open, lots of vol­ume came in)
    •  would rule against this with PVAL only 39 pips above would make for a slight­ly tight x2 under cur­rent entry rules (although not too bad). Com­bined with ear­li­er men­tioned con­ges­tion of M30/H1 sup­ply and H4 VWAP and new D1 con­ter­mi­nous supply.
  • #3 Super risky one — going long on a break of IB straight into m30 sup­ply and hope for the best 
    • Obvi­ous­ly we’d like to avoid option #3 most times. But occa­sion­al­ly when you have very strong momen­tum, trade loca­tion does­n’t mat­ter as much because the momen­tum will reward the poor choice of location.
    • If price would pick up in speed ie. low­er time frames show­ing price ‘jump­ing up and down’ indi­cat­ing a pos­si­ble burst in momen­tum then PERHAPS this would be a play to con­sid­er. But we aren’t see­ing any of that right now. 
  • I decid­ed to stay out of a trade today mere­ly observ­ing price devel­op­ment due to lack of con­fi­dence and expe­ri­ence trad­ing what I saw
    • If E closed as a bear­ish engulf­ing then it would have been a strong pos­si­bil­i­ty for option 2
      • Option 2 would have implied that the large bear engulf from the open will hold (coin­cid­ing with D1 con­ter­mi­nous sup­ply 1.40663) and there­by elim­i­nat­ing VAL for a poten­tial trade loca­tion for today but for that we need­ed the D sell­ing tail to stick around
      • If it did it would have been more like­ly to keep drop­ping down to swing extreme due to larg­er timeframe
    • Anoth­er ledge formed exact­ly at IB top edge dur­ing F and I mon­i­tored if price was going to defend or take it out
      • If the ledge was tak­en out we’d be look­ing at a failed auc­tion although ledges of 4+ TPOs is pre­ferred because more time was spend mak­ing it
      • If the ledge is defend­ed it would be a low­er prob­a­bil­i­ty set­up since no VAL oppor­tu­ni­ty and being late in the session
        • A low­er time frame can­dle close could be good for an entry long here giv­ing a tight stop 2x+ R/R potential
      • Ledge was defend­ed togeth­er paired with a Three inside up pat­tern on M5, 3rd can­dle would have been the entry with stop few pips below the formation
      • Once a ledge has been bro­ken or defend­ed, a quick move comes right after and this was a text­book ledge defense
        • Price con­tin­ued to extend up and did indeed reach PVAL giv­ing a 4x prof­it target
        • I will take notes on more of these to grow con­fi­dent in this type of oppor­tunis­tic setup
• AFTERMATH (post trad­ing win­dow, after noon)
  • In the after­math price even went as far as PPOC and over slight­ly hit­ting M30 Upper KC and H4 QHi before revers­ing down quite violently

How accu­rate was my assess­ment of mar­ket context?

• I did good here. My obser­va­tions didn’t give me the right ‘feel­ing’ in tak­ing a side in today’s ses­sion, this then was con­firmed by my obser­va­tions in MP and backed with com­ments by Dee. 
• Even though I did mark D1 con­ter­mi­nous sup­ply 1.40663 on my chart I failed to take it into con­sid­er­a­tion when look­ing at option 2. I have got­ten bet­ter at keep­ing an eye on lev­els but I missed this today in the ‘hub­bub’ of learn­ing some­thing new. Prac­tice this more. 

How did I feel before, dur­ing, and after the trade?

• Did not take any trades today but learned a lot about a poten­tial future set­up I can take: ledge defense.

How well did I fol­low my process?

• I did well here. Even posed with alter­na­tive options I stayed with­in my own com­fort and stayed clear-head­ed. Now this doesn’t mean I should always stay with­in my com­fort zone, no. This does mean that when learn­ing some­thing new I need to build expe­ri­ence in the move with more than just 50% knowl­edge of circumstances. 

How well did I man­age my phys­i­cal, emo­tion­al and cog­ni­tive states?

• I did well here. 

What did I learn today?

• It was anoth­er Ledge-day (body­builders got leg-day, we got ledge-day. Can I trade­mark that?!) O…K… Con­tin­u­ing… So anoth­er ledge was formed on MP. This ledge con­sti­tutes where oth­er mar­ket par­tic­i­pants keep assault­ing the same price point. If the ledge is tak­en out we’ll see a con­tin­u­a­tion of the move, if defend­ed we reverse. 
• I am learn­ing a lot!

What’s one thing I need to do more often?

• Keep excite­ment in check and fol­low the process. 

What’s one thing I need to do less often?

• I did good today. 

For my trade plan(s) on this par­tic­u­lar day, go here:

Pre­mar­ket Prep USDCAD 05152020