15th June 2022 - Trading Journal
Today's trading journal is brought to you by IBKR. I use them as my main brokerage for both investing and trading. As a European investor I have tried several different platforms and I can safely say they have the most comprehensive platform available to any EU based investor. In terms of platform power, safety and products (Stocks, Options, Futures etc.) You can check out the platform here.
Note: June 10th all my stops were hit and some trades I actually cut before the stop was hit: $ZM & $SHLX to be precise. The market action was dire and in times like this it's best just to step aside.
June 13th & 14th: I made some day trades - shorting $DOCU, $HES & $CVX intraday for opportunistic small moves with size on a heavy downtrend day. June 14th I had a small win on another intraday trade with $LI on Chinese strength.
Not much pre work was done on these trades and I find they are difficult for me to do consistently on a daily basis but in short hits here and there when the trade is very obvious or good RR I'm okay with it to give me a small green day when there is no point in looking at swing setups.
Pre Market Work:
With the FOMC meeting today I will be simply waiting to see what happens with that. I have been studying the $SPXC this morning for a potential "scenario". This is mainly just an exercise but nevertheless here it is.
When the market has these moments such as the Fed Meetings or catalysts it tends to make a quick fake move one way in the minutes after the announcement or news then reverse the opposite way. This could happen hard today. I have no idea which way that will occur if it does however here is a potential.
We make a quick red move after the meeting then hard rally upward toward the 3900 area. This would catch a lot of people offside and the market likes to do that. The reason for the 3900 area is the gap and the 10MA.
Or maybe the market plummets. Who knows. If i was to trade this scenario I would be using the current market low as my area to trade against. That way the risk is managed objectively and the upside is great in terms of RR. 10:1. If the stock moves up instantly and you miss your entry well then that's that. Never chase.
Again this is scenario building out of interest.
In other notes a lot of names were reset but Chinese stocks are still looking like they are making interesting moves. $PDD & $LI in particular.
I eventually took the $SPXC trade using Mini Futures. I executed it fairly okay. It could have been done better but the idea played out to perfection. This was the only trade I took today and moved my account almost 3% with an excellent RR and risk in check.
End of day Thoughts:
In trading you do not even need to be right 50% of the time. You can become a multi millionaire being wrong 80% of the time once the odds are skewed in your favour. If I can flip a coin over and over and receive 2 Dollars every time I hit heads and only lose 1 Dollar ever time I hit tails I will compound. Now imagine you win 3, 5 or 10. That coin flip can actually be rigged against you in terms of win rate and you will still come out ahead.
Stanley Druckenmiller says SIZE SIZE SIZE when you see your opportunity skewed heavily in your favour. Pradeep Bonde calls it picking up free money.
That is the essence of trading and getting that mindset.
Notes & Open Trades:
- No Positions
Please note I operate my risk with options that I can lose 100% of the premium. This is the safest way to trade them in my opinion. Even if I cut at 50% once I am setup to lose 100% within my risk threshold then I will stay ahead of my required R:R.