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Take small losses or the market will take everything from you.
Dear Traders,
The market is going through a correction. SPY and QQQ are pulling back to November’s lows, Bitcoin and crypto are down, and volatility is back on the table. The strongest stock at the market open was Tesla, which just hit all-time high yesterday. But it quickly went down from $495 to $469.
This is the kind of environment where discipline matters more than predictions. I traded Tesla yesterday and today in the morning session.
The first trade was a loss. I was shorting TSLA using my Tradebook: Opening Range Breakout short. Price broke down, but it didn’t follow through. Instead, it snapped back toward VWAP, and once I saw that breakdown fail and price started reclaiming VWAP, I did exactly what my rules tell me to do.
I stopped out. No hesitation. That loss wasn’t fun, but it was small and controlled.
Then something important happened.
On the 5-minute chart, Tesla printed a bullish engulfing pattern, VWAP was reclaimed with strong volume, and momentum flipped. So I did what traders with rules are allowed to do.
I flipped my bias and went long, and this time the trade worked beautifully. The risk-to-reward was clean, the execution was solid, and not only did it recover the loss from the first trade, I ended the day green by $13,000.
That’s the reality of trading for a living, with a sustainable approach.
I did a detailed recap on these 2 Tesla trades and uploaded to YouTube. I also shared a very important lesson on trader psychology, based on a true story of a funded account trader at Trading Terminal.
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