20210823 Trade Review DAX

24 Aug 20210823 Trade Review DAX

Play: Failed Auction

#fin­twit #order­flow #day­trad­ing #trad­in­gre­view #price­ac­tion #chartre­view #DAX #DE30 #DE30Cash

Mar­ket Narrative

D1 Inside bar with long buy­ing wick and base cre­at­ed some demand. Trend was up 2/3. Open sen­ti­ment was huge imbal­ance on account of 1.96xASR Above Val­ue, Out­side Range. This cou­pled with a huge IBR of 1.25xASR any sus­tained auc­tions would be less prob­a­ble. Look­ing for ASR/ADR lev­els for con­flu­ence for a bounce is the way to go. 

What hypo was it?

Hypo 2

Failed Auc­tion Long, Pos­si­ble Strength from with­in IBR

I actu­al­ly intend­ed this to be Hypo 1 but as I had done so in a pre­vi­ous prep but to my rec­ol­lec­tion I did it wrong that time I placed it as Hypo 2. Now I have reaf­firmed that when IBR is this wide (and learned some­thing new) at a huge imbal­ance open sen­ti­ment. We look for failed auc­tion or strength from with­in IBR coin­cid­ing with tech­ni­cal lev­els such as ASR/ADR, SD zones etc. 

How was the Entry?

I want­ed to get a slight­ly bet­ter entry and saw that there was a M15 Bull Engulf devel­op­ing. I took the M5 con­sol­i­da­tion as my entry point and wait­ed for a tran­si­tion to M15 bull Engulf which came. This then pro­ceed­ed to tran­si­tion into a M30 Bull­ish Inside Bar.

How was the SL place­ment and sizing?

SL place­ment was slight­ly tighter due to the M5 entry. SL place­ment was just below the M5 demand formation. 

How was the prof­it target?

If price had moved all the way through IBR it would have been a 4.8R tar­get. How­ev­er, on days where you have a huge IBR we should taper out expec­ta­tions. This cou­pled with sum­mer time trad­ing I thought 1.5R would be achievable. 

How was the Exit?

When M5 Failed to close above M5 VWAP I took this as my exit sig­nal. What fol­lowed was a M15 Bear Engulf so in hind­sight I feel this was the right call. 

How­ev­er, the mar­ket nar­ra­tive of trad­ing at a D1 demand, Failed Auc­tion, plus this being equi­ties hav­ing an upward bias, as well as a pos­si­ble con­sol­i­da­tion on M30 I could have stayed with the trade and I grasshop­pered tak­ing 0.5R profit. 

What would a price action-based exit have done for the trade?

If the exit was based off the M15 Bear Engulf then I would have tak­en a ‑0.6R loss. How­ev­er, due to price con­sol­i­da­tion on M30 I could’ve left the trade go on longer. The trade even­tu­al­ly hit 1.1R before pulling back dur­ing my trad­ing win­dow so a time-based exit would’ve overruled.

What would a time-based exit have done for the trade?

0.9R. 0.6R in over­lap noise.

What did I do well?

I did well to take the entry off the M5 con­sol­i­da­tion as this is not some­thing I do often. I was even think­ing if I’m not just sim­ply jump­ing the gun on the entry. How­ev­er, due to the loca­tion and nar­ra­tive I decid­ed it was worth the oppor­tu­ni­ty. I did well here. 

What could I have done better?

I could have let the trade go on longer. This has been a recur­ring theme where I get great trades but leave mon­ey on the table by grasshop­per­ing out of them. My aim is to get com­fort­able again with stay­ing in trades longer so will try to bose my exits off the M30 and not off the M5/M15.

Obser­va­tions

I am get­ting bet­ter at find­ing good trades but lack the con­fi­dence to stick with them. To force myself to stick with a trade a while longer I will focus my exit off the M30. 

Missed Oppor­tu­ni­ty

N.A.

TAGS: Trend is UP 2/3, Huge Imbal­ance, Above Val­ue, Out­side Range, Wide IBR, 

Pre­mar­ket prep on the day

20210823 Pre­mar­ket Prep DAX

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