Trade The Journey

Trade The Journey

Trade Review: Week of October 29

Trading Asset: DIA (Dow Jones ETF)

Trade Strategy: Vertical Put

Leg 1: Buy $332 put

Leg 2: Sell $326

Trade Expiration: 11/03

Premium: $1.90

Profit: $1.01

Hypothesis: The recent pattern in the DIA looked a little shaky but with earnings and some major economic reports being released, things could change fast.

Trading Mindset Insights: Given the current global landscape, from geopolitical tensions to escalating costs affecting both consumers and corporations, it’s hard not to feel the weight. And with earnings season right around the corner, the stakes only seem to rise. Reflecting upon my recent trades, I discerned a trend; my trade decisions were impulsive, driven by the immediate price fluctuations. While my predictions often hit the mark, my timing frequently faltered, with trades blossoming post my exit. Hence, I’ve pivoted to deriving cues for entry and exit from charts. Sounds rudimentary? Trust me, identifying the pitfalls in one’s trading approach is a tougher nut to crack than it appears. Emotions, those pesky culprits, cloud our judgment, making us lean towards feelings rather than logic. Admitting a mistake, especially after dedicating considerable time and thought to a trade, can be a bitter pill. And then there’s mastering humility; lest the market knocks you off your high horse. A few profitable trades can distort your perception, lulling you into overconfidence. Trading is a daunting endeavor, to put it mildly. No sugarcoating here.

Analysis Breakdown: The deeper I delve into my trades, the clearer the revelations from indicators regarding market trajectories. A keen observation: DIA encountered resistance at 332 and found support around 329, with a secondary support at 328. Drawing from the earnings insights of giants like Google and Microsoft, and sensing a possible uptick in yields, market sentiment seemed poised for a downturn. Economic data releases like GDP, New Home Sales, Initial Claims, and PCE further solidified this belief. Post a bullish trade hiccup last week, the charts insinuated there might be further declination on the horizon.

Trade Strategy: For this trade, my guiding lights were the charts and the premium. The unfavorable response to Google and Meta’s earnings, coupled with GDP growth, played pivotal roles. DIA’s 332 and 329 held their grounds till a downward breach occurred. Instead of holding onto the trade, I anchored an acceptable return via a stop and made my exit. Examining various time frames, the resilience of my reference points was evident. The moment DIA breezes through these markers, it’s indicative of the market’s sentiment.

Trade Reflection: The art of trading hinges on adaptability. At times, the market’s pulse is palpable, and at others, it throws a curveball. The key is to be fluid in strategies while maintaining a firm stance against excessive losses. Losses are par for the course, but they can be managed. My current focus is to bow out before a trade snowballs into a significant debacle. The recent trading journey has been a rollercoaster; a substantial loss one week, followed by an impressive gain the next. The roadmap ahead? Prioritizing cutting losses and refining exit strategies to capture maximal profits.

Trading Log:

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