Thursday, August 4, 2016

Fear - Day Trading: August 03, Intraday

Bad day

I did not post yesterday, because I was disappointed. There were too many trades, and ALL THE TRADES THAT I TOOK were losers. Did not take some trades that could have been winners (hindsight). There were also a couple of trades that I took, that would have been winners (hindsight), except for tight Stop Losses. A day everything was bad for me....

I had also decided to change my Stop Loss trailing strategy, but never got a chance to move Stop Losses even once. Haha.

GST anticipation

It was the day of the GST bill being presented in the Rajya Sabha at 2 PM, and looking at the chart it appears that that news affected me more than it affected the market. My bias was long for the GST news.

Fear, Justification, and Coulda-Woulda-Shoulda

There were 2 kinds of fears that affected my trading. One was the Fear of Missing Out (or is it Greed?) that made me take trades in anticipation of news based big moves. The other fear was the Fear of Increasing Losses that caused me to not place trades at locations where I otherwise would (probably) have profited. But if any of these trades had turned winners, then I probably would have had a justification about why that was a correct trade.... or probably not. I dunno, man.

In any case, I was not patient. If I had been patient, as I had intended, then I would have had a maximum of 1 or 2 trades, or even a no trade day. When I started discretionary trades in this series, my clearly stated objective was to be patient, take trades only on great set-ups, even if I missed on many good trades. Clearly, I have failed in that objective.

Nifty M3 Price Action Chart

The initial down move

I took the first trade early, right below the first M1 bar low. After all, it was GST day. That trade failed in less than a minute. It caused me to avoid the next 2 opportunities to short. Missing those 2 opportunities caused me to take the next trade early. I took the second short after a pullback, without waiting for break of 8600. I thought it was a fast moving market, with higher volume bars, on GST day. Fear (Greed?) of Missing Out was in play. And it was indeed a moving market with volume. Look at the volumes on the first 10 bars.

The bug of god

I placed a long above the Pin Bar that bounced from 8600... and immediately regretted - I did not want another loss. Somehow, like magic, the order did not appear on my terminal. And I thought that god had appeared in the form of a software bug. That fear of loss dominated until a good up move and a good down move was complete.

Price Action at 8600

After a Master Candle at 8600, pullback short failed. Breakout Failure long lasted longer, but failed.

The next trade was a pullback short. Though my bias was long, I took an early short based purely on the Price Action. I should have waited. Then, I ignored the Breakout Failure long.

Action during GST debate

Really, there was not much action. There was a higher volume bar just before the bill was presented. My bias was long, so I went long above it for a loss. Then went short below it. That short would have worked well, except that my Stop Loss was hit!! Stopped trading after that.

Now, that the GST bill has been passed, I think that market will open higher. I have not looked at SGX Nifty yet... let's see how good my judgement is.

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