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Option Day Trading SPY and TSLA: 3/21/23

 

My Daily Process for Trading SPY and TSLA Options

DAY GOALS

  • Focus on Intraday System Pattern A-C. 
    • Pattern A: reaction zone crossovers for an RZ reject or RZ bounce
    • Pattern B: key levels for a KL reject or KL bounce.
    • Pattern C: RZ breaks (only on clear long-time duration formations)
  • Do not trade anything else.
  • Keep position size small. DO NOT AVERAGE DOWN ON ENTRIES!
  • Plan for the clear setups ONLY!
  • Patience is the key to solid entries and to maintaining low-stress levels.
  • Fewer trades with more confidence.
  • Focus on SPY and TSLA options ONLY!
  • Time to simplify the process and improve/reach the next level.
  • Actively challenge my regression pattern to ONLY trade my plan.
  • Do not give in to negative triggers.
  • FOCUS ON POSITIVE TRIGGERS.

PRE-MARKET PLANS

Market News

  • It looks like we have no high-impact news today. Instead, all eyes await the FED's rate decision on Wednesday. 
    • Let's see what the market wants to do in the meantime!

SPY

  • For today, I have these levels marked: 
    • Reaction Zones: 
      • 394ish (yellow)- the cross-over happened already through the gap up. Look for the possible RZ bounce if we have a fast pullback at the open. If we cross over to the downside, looking for an RZ reject.
      • 392ish (yellow)-wait for the cross-over for the RZ rejection or possible RZ bounce, but it depends on price action.
  • Key Levels:
    • 400 (thick red/white lines)- wait for the KL reject.
    • 389 (thick/red, white lines)- wait for the KL bounce.

TSLA

  • For today, I have these levels marked: 
    • Reaction Zones:
      • 186ish (yellow)- cross-over has happened already for the RZ bounce; wait for a pullback to this level near the market open.
      • 184is (yellow)- could be a nice RZ bounce but depends on the price action or waiting for the cross-over to the downside for the RZ reject.
    • Key Levels:
      • 192.50 (thick red/white lines)- wait for the KL reject. 
      • 180 (thick red/white lines)- wait for the KL bounce.



RAW TRADING NOTES

  • A C pattern forming on TSLA at 190. 
    • Took the RZ breakout.
    • Sold into strength. Probably selling too soon, but to stay in the positive behavior cycle, I must sell and take profits. 
      • If I hold and give back gains or take a loss will shift me to the other cycle, making me more susceptible to other negative triggers.
  • TSLA KL reject almost in play...
    • Got in a little bit sooner than I wanted...
    • Got a nice reject, but options barely moving, and I got in too soon, so just locking in small profits here.
      • Left another 0.20 cents per contract on the table if I held another 5-10 seconds...
  • I do not really like the price action today.
    • slow and muted moves.
  • Definitely need way more patience today than I am willing to give.
  • Solid rejection at the KL on TSLA. Too bad I did not have the patience!
  • Possible bounce again at the 190 RZ on TSLA.
    • I really like the possible RZ break to the downside here...will watch this closely.
    • Well was wrong here gave it a bit more time as I have been selling too soon, and guess what? The market didn't want to give it to me, so I took a more significant loss than I wanted. I may re-enter soon for the same play if it fails to bounce.
    • down on the day now (-$4.00)
    • Well gave it a shot.
    • Losses adding up.
  • Was a better RZ bounce setup than break...
  • Sucks but stuck with plans, and unfortunately, they didn't play out and needed to sell for losses a few times.
  • Sucks I sold too soon on my winning trades...
  • Need to regroup and be patient for other setups. 
  • I still like the 190 RZ break will give it a rest for now...
  • Possible 192.50 break...market seems to want to keep going higher...
  • I could have minimized my losses today by not giving losers more time.
    • need to separate giving more time to winners and giving more time to losers.
  • Debated between entering TSLA RZ break at 192.5 or entering for the 396 RZ bounce on SPY.
    • entered SPY.
    • Might have support and slowly grind back up to day highs...
    • If it can't hold 396, I will be out!
  • haha, nice break on TSLA (not in it!).
    • at least SPY is uptrending now too.
  • New stop is at 397 for SPY.
  • Well, I probably can hold longer, but I'll take my gains.
    • made back losses and then some...
    • It seems like the two plays that surfaced were solid, either TSLA or SPY.
  • Kinda played subpar today, so I might be closing up shop early...
  • It seems like TSLA was the better play! Damn!

POST REVIEW

  • Well, today was somewhat non-eventful.
  • I traded okay performance-wise.
    • I still could have been better at managing the risk of losing trades. I think I need to better distinguish and also consider that if I am in a losing trade to not give it time; if in a winning trade, I have an option of giving it more time (maybe considering selling a partial position first?)
    • The reason why I gave some trades more time today is that I sold too soon on my initial trades. Every trade is unique and should not be considered a linked event. 
    • I tried to justify holding longer because I was selling too soon on past trades, but in terms of random chance, the more times I sold too soon with a greater n, the more likely the results would revert or regress back to the mean. So it would be better to not let past trades influence my decision on future trades.
  • Market and price action, in general, is somewhat divergent from the norm, and it could be because everyone is awaiting the FED's decision tomorrow.
  • From my perspective, I probably didn't need to trade today, but there were some setups, but nothing that absolutely fit my patterns/ performed well when they did fit.
  • One thing was clear, especially for TSLA; if you had a bull bias today, you would have made money for sure, but other than that kind of tricky to play the price action today.










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