Option Day Trading SPY and TSLA: 3/31/2023

 

My Daily Process for Trading SPY and TSLA Options

DAY GOALS & RULES

• Focus on Intraday System Pattern A-C. 
• Pattern A: reaction zone crossovers for an RZ reject or bounce. Or a spike into RZ for an RZ reject/Panic into RZ for an 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
• FOCUS ON ADAPTING TO PRICE ACTION

PRE-MARKET PLANS

Market News

• It looks like we have Core PCE Price Index data and Michigan Consumer Sentiment data as the high-impact news today at 5:30am PST and 7:00am PST, respectively.
• The markets have been sneakily and steadily strong recently, so let's see what happens today!
• Depending on the reaction, we could see a continuation or a pullback from all the strength.

SPY

• For today, I have these levels marked: 
• Reaction Zones: 
• 404ish (yellow)- already at the RZ and is also a KL. Let's see if we can get the cross-over for the bounce or if we have a strong pullback and spike back up, maybe for an RZ reject.
• 402.50ish (yellow)- wait for the panic for possible RZ bounce or the cross-over for RZ rejection. 

• Key Levels:
• 406.50 (thick red/white lines)- wait for the KL reject. The next KL is at 407.50, which may be a better level.
• 401.50 (thick/red, white lines)- wait for the KL bounce.

TSLA

• For today, I have these levels marked: 
• Reaction Zones:
• 197ish (yellow)- wait for the cross-over for the RZ bounce. Mid-range here, so a possible RZ reject play if there is a morning spike. Overlap with a KL, too, so it might be a strong reaction either way.
• 195ish (yellow)- another overlap for an RZ and a KL; wait for the panic to the RZ for possible bounce; otherwise, wait for the cross-over to the downside for the RZ reject.
• Key Levels:
• 200 (thick red/white lines)- wait for the KL reject.
• 194 (thick red/white lines)- wait for the KL bounce.

RAW TRADING NOTES & COMMENTARY

• I gave the intraday RZ reject a try, was up a bit, and gave it time, but I needed to sell for a loss. 
• unfortunate, but slight loss.
• The better play this morning was taking the TSLA 197.50 RZ break.
• I need to wait for the KL rejects now.
• Kind of crazy how the markets are still grinding higher. At some point, more people will want to take profits.
• Seems all the moves were at the open. Not my style, so I just need to be patient now.
• Might take TSLA KL rejection at 200 soon.
• I got in probably a bit soon, but this is a critical psychological level, too, so it might be okay to be a bit early.
• of course, when I get in crickets
• price action still keeps me on edge.
• annoying how it is holding up.
• got the push-up to my perfect entry that will be my stop loss...again could have waited for this entry too.
• getting a little rejection now on the 5min....contracts barely moving...
• frustration level climbing with the non-movement of the contracts when clearly have rejection.
• was up maybe 0.10 cents per contract and should have taken it.
• back near breakeven...looks like we might chop at the highs for a bit...
• Well, I average my entry...I said I would not do this anymore, but I fully accepted the risk and had a conservative stop.
• annoying how price action is today, though...
• if 200 holds, I'll probably cut my losses.
• if it looks like it will break, I will stay in longer.
• Jeez, this week has been so very frustrating!
• Might just end today red...
• I am trying hard to stay patient.
• Seems like I should have chosen SPY for the KL reject instead of TSLA.
• LESSON: when the trend is up and grinding up, it is probably better to go with it.
• I knew it would have been too easy to have a lean rejection off of 200.
• annoying, but no one to blame but myself
• This sucks. So much strength when I am trying to capture rejections.
• The more this goes on, the more the scenario of it just fading and reversing/grinding down all day below the lows is likely...seen this so many times.
• I'm either going to cut for a decent loss today.
• Going to cut for a breakeven or slight loss.
• Gong to make a small profit.
• Very unlikely I will have the patience to hold for a big move.
• let us see how this plays out. Now that I have written out all the scenarios let's see...
• Still in TSLA and just got in SPY KL reject...
• Got out of TSLA with significant loss.
• failed here.
• averaged down and held too long. I wanted it too much today or, more specifically, to be correct.
• a better description is maybe I failed to see what I needed to see. Adapting to price action. Not necessarily that I wanted it too much, but I could not see the better way to capitalize, etc.
• extremely hard to have stayed in the positive cycle...I think barely being in the positive cycle all week weighed in on today's behavior.
• TSLA had a solid critical level that should have had resistance. Was perfect.
• I was blinded for too long and fell into the trap.
• Today is Friday too, so I should have been more cautious about longs since it is a short squeeze day.
• I did not consider this since I hardly traded stocks too often, but a stock that always has a ton of shorts is TSLA.
• failed to realize this.
• At least I am long TSLA in my IRA at a 179 avg so at least this move-up gave me some money in my other account..lol
• Still holding SPY puts...will give this one some time. I have my stop loss marked, so I will adhere to this.
• Down on the day, like -$300.
• Lessons to be learned this weekend for sure!
• I failed to adapt when my previous plan was broken.
• wanted it too much and was not able to change fast enough.
• Averaged my SPY KL reject play.
• Accept all risks here.
• If this is a loss, so be it. I will be red a few hundred on the day, but I tried.
• Will learn from this week.
• But for now, gotta focus on this SPY trade.
• Oh man, today is just an amalgamation of everything.
• overtraded
• failed to adapt.
• wanting more
• adamant about resistance levels even though everything points to strength.
• What I am not doing is holding and hoping, but I am trying to see if these levels work....seems like they just will not work for me, and once again will take a more significant loss wiping out decent gains all week.
• bigger size 
• averaged down
• of all the days to take a stand, I chose the worst day!
• So close to cutting losses and accepting this big red day.
• So close.
• Market is testing me, and I am also testing myself. 
• I already failed to avoid this situation, but how do I proceed now that I am in it?
• I am trying to be aware and take stock of all the scenarios. 
• One thing is for sure, I am confident this day will be used to propel me forward, win or lose. I will utilize this for my own betterment.
• TSLA wow, just straight up!
• a critical note to make, today's frustrations are not from what the market is doing but more from my actions. 
• I think I am more frustrated that I failed to adhere to certain things today and could not overcome some behavioral issues before it was too late.
• holding too long
• failing to adapt and read price action etc.
• I still can't believe all the days to take a stand. But I needed to do this on this day.
• SPY rejecting but very slow. TSLA finally retracing now too.
• around breakeven on my SPY puts....but a massive position, so it fluctuates a big dollar amount...I do not like it.
• I really do not like how today turned out, but what I am ready for is to use this day to grow.
• I'm patiently waiting for my last play to see which direction I need to go for next week!
• Lower high on TSLA and lower high on SPY.
• come on, let's go!
• Well extremely frustrated now. I waited more than an hour for the price to come down, and the moment I thought about taking a $150 profit, it was taken away. I waited an hour....a freakin hour, and the moment I even considered taking it, it moved in the other direction. Why couldn't I have thought about it sooner?
• Now I am now down -$100.
• These are the mind games I play day in and day out.
• yes, I could have avoided all this, but I chose not to.
• I wanted to see, and now I got my freaking answer.
• unbelievable, now back to where I started 1 hr ago. All wiped out in 15 min....now will probably take the loss.....
• I feel like I am so close to my breakthrough, and then days like these happen and put me in my place.
• Let's see if we get a double top at the day highs.
• That seems realistic to me, but I guess I ask too much.
• I still can't believe it. I could have taken that 150 profit so many times I was staring at it...and did not really consider it, but when I did, things moved too fast, and it was too late.
• One day. It's all it takes. One day to let things get out of hand. One day of compounding. 
• The shitty part is the markets will probably just gap down on Monday.
•  There is no way I am holding this over the weekend because I am never lucky like that.
• Just trying to vent.
• Looks like a possible double top on SPY, but TSLA just keeps going, so it probably will go sideways.
• Still so much strength!
• It seems more and more that I will need to cut and have a red week.
• I'm frustrated with myself. I caused this. I failed to adapt today and chose a battle that was stacked against me.
• Always seem to be on the wrong side of these plays.
• I know at some point I will remember this and want to play the long sides, and it will not work like this...it will be the exact opposite. 
• The best thing moving forward is I need to adapt and read the price action better.
• at some point today, I forgot to consider that and let biases override my trading.
• Looks like we are now seeing some volatility.
• might still go in my direction...unlikely, but who knows...
• if we can break the 406.60 RZ, it could happen.
• Shoulda, coulda, woulda done a lot of things today.
• These are the days I get smacked down, and then when I think I learned my lesson and do the opposite next time, that's when it works.
• this mindset I had today will probably be perfect for Monday, LOL. But on Monday, I won't be adamant or have this mindset and will get dismal results... just missing the right mindset to capitalize.
• hard to make the right move.
• I think it is best to get better at reading price action.
• I can't believe it will stay strong the whole day.
• what a day to want a grind/fade down...almost power hour, and it's looking slim.
• oh man
• Ok, damn, out!
• What poor performance on my part.
• The only valuable thing is the lesson from this.
• A couple steps backward now.
• Will keep on fighting.
• I just negated this week's and last week's gains.
• Surprise!
• I know what I did wrong and know how to fix but what I do not know is how to not let this happen.
• I just did not have any wins today.
• Could have cut losses
• Could have taken my profits earlier.
• Could have done many things.
• Why?
• I want to get better, and it is clear to have capitalized today, I needed to better adapt to price action. I was too stuck in one way of thinking.
• it could be that I didn't get enough sleep last night.
• It could be that I have been trying so hard to improve this week that I needed to regress.
• so many things.
• but this is the result.
• As a type, SPY just has a huge 5 min spike up...saved me a headache there...so things could have been a lot worse! Grateful to have gotten out when I did.
• Props to anyone who bought calls or played calls today...that was how to do it today!
• I just got all messed up and focused on puts today.
• These days are hard because not every day we go straight up. It's not every day we go straight down. So it's hard to mentally prepare for days like these.
• But as I am writing all this out, I need to be more agile with my mindset and be able to shift from calls to puts or puts to calls on a moment's notice. I was aware of that before, but for some reason, today, that just never became part of my day.

POST REVIEW

• Well, I figured another lesson was around the corner.
• I deserve this 100%.
• I could have managed this better, but I needed to see this through today. I fought hard, and it is clear that I was fighting a losing battle from the beginning.
• There are opportunities when you have a plan, and it works in your favor, but when it doesn't work in your favor, you must minimize losses. If you continue pursuing your plan and it is not working, you must reformulate.
• There is more opportunity available when you can freely adjust your mindset in concert with the market.
• I failed to do this today, stuck with my guns, and got slaughtered. I was right on some positions but was quickly reminded to take what was offered. 
• Let some gains turn back to red.
• This scenario today is unfortunate, but I am grateful for it because I must now focus on ADAPTING TO PRICE ACTION DAILY.
• This is added to my daily goals; I must make this front and center.
• The market just keeps going!
• It's like I was used to doing one thing a certain way, and now I was forced to find a different way, but I still wanted to do what I have been doing only to be unable to do what I need to do from the beginning. 
• It feels like this day was wasted in a way in terms of opportunity, but I realize that I needed to learn how to adapt sooner.
• This loss sucks.
• But I need to keep moving forward.
• Need to get better.
• I have to.