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Option Day Trading SPY and TSLA: 3/22/23


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.
  • Do not give losers more time!
  • FOCUS ON POSITIVE TRIGGERS.

PRE-MARKET PLANS

Market News

  • It looks like we finally have the high-impact news we have been waiting for today. The Fed's economic projections and Fed's interest rate decision will be released at 11:00am PST, and the following Fed press conference will be at 11:30 PST. 
    • The market might have tons of chop up until this.
    • Let's see what the market wants to do in the meantime!
    • Then let's find out where the market wants to go after!

SPY

  • For today, I have these levels marked: 
    • Reaction Zones: 
      • 399.25ish (yellow)- wait for the cross-over for the RZ bounce. We are right at the significant resistance at 400, so we can break above or reject hard. Will need to see what price action wants to do here. 
      • 398.25ish (yellow)-wait for the cross-over for the RZ rejection.
  • Key Levels:
    • 400 (thick red/white lines)- wait for the KL reject. The next level above is 401.50
    • 396 (thick/red, white lines)- wait for the KL bounce. Next level below 394.


TSLA

  • For today, I have these levels marked: 
    • Reaction Zones:
      • 200ish (yellow)- Tested this level pre-market already. Need to wait and see what happens here.
        • 200 is the main key level.
        • can break above for a possible RZ bounce
        • Or reject here and a possible RZ reject.
      • 198is (yellow)- wait for the cross-over to the downside for the RZ reject.
    • Key Levels:
      • 204.50 (thick red/white lines)- wait for the KL reject. 
      • 195(thick red/white lines)- wait for the KL bounce.



RAW TRADING NOTES & COMMENTARY

  • Damn, I placed my order for puts on TSLA and missed my entry (no fill). Rejected too fast. Need to wait now.
    • I missed a $1 per contract trade here.
    • It's ok; I must focus on the proper behavioral cycle. 
      • Need to remember I'm on the right track and not beat myself up that I missed it.
  • It seems we will trade between the RZs on both charts for a bit.
  • Possible TSLA RZ breakout at 200.
  • Got in too soon for the TSLA RZ break to the upside.
    • too risky...didn't fully comprehend the risk I was taking at the significant key level area
    • should have been more for a reject than a breakout!!
    • gave the loss too much time!
      • did not learn my lesson from yesterday!! NEED to work on this. (ADD TO DAY GOALS)
      • taking this trade was ok, but I need to limit losses when I am wrong and not give it time.
      • Giving positions more time on green trades is different, and I am sure I will discover all the nuances of this when I get more observations now that I am aware of the distinction between these two ideas.
  • Got in on for the TSLA RZ break to the downside.
    • Nice took most of the move and made back losses from the last trade.
    • up on the day now.
  • Will wait for the KL bounce on TSLA.
    • damn didn't quite hit the level but bounced right above it...
  • 198ish RZ on TSLA RZ reject setting up.
    • got in a bit early.
    • testing my risk...never easy!!!
    • nice, I got the rejection. Most likely selling too soon here but do not care! Staying in the positive cycle and taking decent profits!
    • Yup, solid rejection.
    • Possible double bottom on TSLA KL zone...
  • Possible 399.25ish RZ reject on SPY forming, or KL reject...
  • Got in TSLA KL bounce.
    • sold
    • just taking nice singles here.
    • I think I would rather be cautious right now since we have potential big news coming.
      • do not want the extra risk.
      • singles are OK, and happy to keep my stress levels down.
  • Things seem to be slowing down now. Will most like to wait until Fed news before thinking about trading again...
  • Well, I stepped away and went to the bathroom and missed the 400 KL on SPY. 
    • Need to wait for another retest now. Thinking it can probably do what TSLA did and come back down, find support, retest, and finally reject.
      • time will tell!
  • SPY consolidation near that 400 lvl...makes it extremely tricky. It will most likely break out, but it will have resistance, too...it's pretty much 50/50. Especially with news coming soon.
    • One thing is for sure, this 400 level will be the level to watch after the news.
  • Finally, news! Fed raises by 25bps.
  • Got in on the nice pop above the SPY 400 KL. 
  • Again probably sold too soon, but things can go wrong quickly on this type of news, so I just wanted to be extra cautious and take my single.
    • yup, I left another like 0.30 cents per contract here.
  • Wow, nice pop above 400 hit the KL reject are at 401.50. Missed it since I was reading and digesting the news for a bit.lol
  • If it can hold 400 might be a solid entry for a bounce/continuation.
  • I missed the better pop and shorts.
  • I'm feeling a bit tired now, so I won't push anything and will probably just let the market do what it wants.
  • Will start fresh tomorrow!

POST REVIEW

  • I jumped in too early on my first trade (TSLA 200 RZ Break), too early in the day too, and didn't fully understand my entry.
    • It could have worked out, but I need to fully understand the risks I was taking, so I feel like I rushed too soon into this trade.
    • 200 was a fundamental level, and without more of a catalyst, it was unlikely to break here (possible but unlikely).
    • I should have weighed more to being cautious and waiting to see what sets up. It was worth the risk to take another stab at the RZ rejection, but I did not realize/think about it when I was reading the price action (only after the fact).
    • Also, I was wrong from the get-go and let my losses get more significant because I wanted to give it time,
      • I was in the position to limit my losses maybe by half, but I chose to give it time.
    • So a few things I could do better is to wait for the clear setups, which I already have listed in day goals but slacked on this today, which is ok; I'm human. The other that I need to add is to NOT GIVE LOSERS MORE TIME! This will help minimize losses going forward. I'll deal with the winning trades later when it becomes more of an issue daily.
  • Nice quick trading on the Fed announcement (raised 25 bps). 
  • The market is digesting the news now and might stick around the 400 level.
  • I think it's best to let the market do what it wants, revisit levels, and have another plan for tomorrow.
  • I had a solid day trading today and do not want to mess up with trading in highly volatile price action and ruin my day.
  • There will always be trades, so I will rest up, see what Powell says at the press conference, and prepare for tomorrow!






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