set aside a setup???

note: been having internet troubles that prevented me from trading past couple of mornings. I hope to have them solved and be up and running tomorrow. my plan from the last post still applies!! just delayed a couple days.

Anyway, my internet got fixed soon after and i managed to smoke myself pretty badly.

some analysis:

I have a setup where huge volume comes in on a big move, then we retrace to the middle of the bar. That's where I take the other side (same side as the initial direction) and stop close to the other extreme of the bar. limit 2X as far as the stop, or a size that is a little smaller than the bar (because i am not stopping the top of the bar, just close to the top). The thing is, this setup is for the 1st bar with volume. If it is followed by more move with volume in subsequent bars, it still only applies to the first bar. And that is where i went wrong. I started to short on the retrace at the middle of the 2nd bar, whose volume exceeded the first one.

I started writing this to say that setup doesn't work for me and I should put it on hold, but then i realized that I actually got really smoked on another trade. I just thought i was doing that one. Instead i just shorted way too early into a big, low volume retrace of a high volume big move. I shorted way too far from the original high volume bar and because of that i kept getting back in, or moving my stop away because I sensed that being stopped out didn't mean the trade wouldn't work. Sure enough, by the time i threw in the towel it really was over and the trade proceeded to roll over.

I think the lesson to be learned from this, is to avoid going on these trades that resemble actual setups i like but have no clearly defined exit, or have one but too far away. Specifically, i must remember, No more trying to randomly pick ends of retraces! It either has to be an exact setup i am approved to trade or I leave it alone.




Incidentally, if i had done the actual setup, i would have lost money, but it would have been 20 or 25 cents instead of 70 (which i ended up losing with my 3 attempts to short as we chugged higher), a number that is much more palatable, and numbers aside, would have been way better because having followed my rules and setup would have been a lot less psychologically damaging. Also, i am finding that this particular setup is a lot less successful when it happens after a lot of bars vs. just a handful or less. I think i should consider not doing it if a long time has passed, or do it way smaller. Something to contemplate.

In the midst of the repeated smokefest of this trade, I ended up missing another great trade setup in the spy which worked beautifully. The old FMATANT. Gotta be on the lookout for this beauty. Gotta avoid dumb trading that prevents me from catching hot setups.

fml