Trade Summary
Morning Trades
I got back in /MNQ past 8:30AM on a huge green candle following the PPI report. Numbers came out lower than expected, signifying a bit of deflation, increasing the possibility of a rate cut this year. However, what I didn’t see was the number of jobless claims went up, apparently a bear signal.
I literally bought the top today and it just came crashing down on me. Traded too early, too fast before I looked at the trend.
The rest of the morning, I averaged down somewhat and then stopped looking at the charts. I’m in for 5 contracts of /MNQ with an average cost basis of 19648.80 while it currently trades within a range of 19530 to 19580.
From my lessons yesterday, I’m trying to sit tight to see if the market goes back up before I realize my losses.
The problem is, I’ve blown past my walk away loss target. Not sure if this is a good idea, but just testing it out. I’m going to derisk if it goes up to 19590-15595 but if not I might call it a day.
I’m seeing a trend that when it start to feel real painful, that’s when it shoots back up. And when I cancel my limit cover to see if it blows past it, it goes back down.
Also, there seems to always be a bit of a pullback starting 9:30 AM when the market opens, and it shoots up until around 10AM to 10:15 AM and crashes back down and stays within a range until the afternoon.
The problem when you FOMO in the morning is, if it goes below a range of your cost basis, then you’re looking at red candles the whole day, hoping and praying it goes up again so you can at least cover close to your cost and not end up red.
And when that doesn’t happen? Then you’re SOL. As of now, I’m waiting and seeing until the afternoon. If I have to realize a 5% loss, fine, I’m back to where I started this week.
Afternoon Trades
The bottom for today seems to be getting higher and higher, and there might be hope for my trades. I did set a limit cover of 19594.50 for 2 contracts, like I mentioned, and it hit at 11:30 AM.
Letting the rest of the 3 contracts ride to see if the market recovers. Hoping I erase my losses for the day and eke out a profit.
Still trying to learn indicators such as VWAP, Balance of Market Power, and Bollinger Bands. They don’t seems to be hard and fast rules and I’m not sure how people automate their trades using these indicators. But it seems to be helping me, just looking at Upper and Lower bands of VWAP and analyzing the behavior to se if it stays within that range most of the time.
Of course, when it’s as volatile as FOMC week, it always seems to be unpredictable.
Before EOD, /MNQ had some crazy action, a huge red candle followed by a green candle a few minutes later. Probably some algos closing and opening positions. Some day I’ll look into this action more. Or someone contact me and explain.
I set a bracket order for a stop limit at 19599.00 and a limit sell at 19650 while it was hovering at 19610.00 and it filled at a loss before market closed at 5 PM.
Takeaways
FOMO is a killer: I jumped in way too early today, chasing a big green candle after the PPI report. I forgot to look at the bigger picture and ended up buying the top. It's a reminder that even with good news, I need to be patient and wait for a clear trend before entering a trade.
VWAP is my new best friend: I'm still learning indicators, but VWAP is starting to make sense. Watching how the price moves relative to the bands is helping me understand market behavior. It's definitely a tool I'll keep using, especially in volatile times.
Market volatility is a beast: I thought today would be easier, but with FOMC week in full swing, things are unpredictable. The quick changes and big swings are testing my patience and pushing me to learn more about market dynamics. I'm still learning, and I know there's a lot more to understand.
EOD: ($601) | -3.5 %
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