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Option Day Trading SPY and TSLA: 4/27/23

 

My Daily Process for Trading SPY and TSLA Options

DAY GOALS & RULES

  • Focus on Intraday System Patterns A. 
    • Pattern A: reaction zone crossovers with confirmations for an RZ reject or bounce. 
  • Fewer trades with more confidence.
  • Focus on SPY and TSLA options ONLY!
  • Time to simplify the process and improve/reach the next level.
  • Do not give in to negative triggers.
  • Do not give losers more time!
  • FOCUS ON POSITIVE TRIGGERS
  • FOCUS ON ADAPTING TO PRICE ACTION
  • FOCS ON (1) CONTRACT FOR PLAN OPTIMIZATION.
  • FOCUS ON THE ONE PLAN THAT CAN PROPEL ME FORWARD DAILY.
  • GIVE PLANS THE BENEFIT OF THE DOUBT AND LET THEM PLAY OUT.
  • BE WARY OF SUCCESS AND THE REGRESSION METRIC (MINDFULNESS)

REFLECTION

I am in a very different place than I imagined, but I think it is for the better and will be a foundation for further growth. I need to further discover the fundamental issues with my trading. 

What is true for me?
  1. I trade consistently, resulting in the performance I achieve.
  2. I win more often than I lose.
  3. I win less $ than I lose.
  4. My performance chart is steadily decreasing.
  5. My frustration spikes because I win less money than I should.
  6. I dig myself in a hole/ continue with my downtrend because my frustration spikes causing me to overcompensate and increase position size, knowing that I win more often, so it seems a better fit to fix the cycle but seems to result in another loss. Sometimes a more significant loss than usual % wise, but most of the time, it is an acceptable loss % wise.
  7. I revert and repeat the process until it meets all the conditions. It is like an action potential.
  8. I am paper trading now because there is something fundamental that I am missing. It is rooted deep. It cannot be solved by trading real money. I must discover it in the absence of trading real money.
  9. Trading real money motivates me to keep persevering. But, unfortunately, I have roadblocks blocking my success in making money.
  10. I will never give up.
  11. This is precisely where I want and need to be.
  12. The closer I get to success the more frustrated I seem to get because I still cannot achieve it.
  13. I have already refined my strategy but can do more.
  14. I must do more to create change.
  15. Change is the only way for growth.
Moving forward, I will only focus on the RZ cross-over plays. I will mark key levels on my chart, but they only serve as a marker, nothing more. I will go through the motions and paper trade like this until my confidence is high enough to risk real money again.

PRE-MARKET PLANS

Market News

  • It looks like we have GDP Growth Rate at 5:30am PST as the high-impact news today.

SPY

  • For today, I have these levels marked: 
    • Reaction Zones: 
      • 407.50ish (yellow zone)- Wait for the cross-over.
      • 405ish (green zone)- Gap up cross-over occurred. Wait for the re-test.
  • Key Levels:
    • 408ish (thick red dashed lines)- marked only for clarity.
    • 404 (thick red dashed lines)- marked only for clarity.

TSLA

  • For today, I have these levels marked: 
    • Reaction Zones:
      • 157ish (yellow zone)- Wait for the cross-over.
      • 155ish (yellow zone)- Cross-over occurred. Wait for a re-test.
      • 154ish (yellow zone)- Cross-over occurring now. Similar to 155.
    • Key Levels:
      • 160 (thick red dashed lines)- marked only for clarity.
      • 156.00 (thick red dashed lines)- marked only for clarity.


RAW TRADING NOTES & COMMENTARY

  • I only have two potential plays.
  • One is a SPY RZ bounce at 405, and the other is a TSLA RZ reject at 155.
  • Let's see what happens.
  • got in TSLA RZ reject at 0.80 (1 put contract)
    • stop is 155.50
    • exit is a break below pre-market lows of 151.50
    • even though I am paper trading, my annoyance when I get in and watch the price action is still present.
    • Just fights my entry...almost all the freakin time!
    • but waiting patiently. My exits have not been met yet, so I need to stay in.
    • my alert for entering TSLA just triggered, so I was a bit early in my entry. This is the better "deal" circumstance I seem to be fighting with.
    • I could have taken my profits on that nice push down close to day lows, but that has come and gone.
    • testing my stop loss...even paper trading, the charts seem to find a way to trigger my frustration...
  • As I sit here, two things.
    • patience allows for the realization of opportunity.
    • trust in your plans allows for a building of confidence.
  • Both SPY and TSLA fighting so firmly but passively near day highs.....
  • out TSLA 0.52.
  • variability of options contracts is very annoying.
  • lost 35% on that trade.
  • could have made that much on the drop but wanted it close to the day lows to exit....something to consider...
  • SPY cross-over occurring..., and TSLA might have cross-over reversal too.
  • will wait to enter SPY around 408-407.80
  • Got in SPY RZ bounce at 1.20 ( 1 call contract)
  • Stop 407.20
  • exit break of day highs at 408.50
  • could have gotten out at 1.35, which was at the day high but going to leave my trade-in and experiment with time...
  • I am giving this trade time; we can hit 409.50 or 410 again...
  • could have gotten out at 1.63...but I want to experiment more!
    • if I sold here, it would cover the earlier loss % wise...
  • sold 1.90 PERFECT!!!!!
  • DONE for the day!
  • Wow...SPY just continuing to grind up all day....seen this happen many times before. The contract I was playing is now 3.59.
  • Now 4.15. Jeez, that would be a 245% gain.
  • This is what has been missing.

POST REVIEW

  • Well, one loss and one win out of two paper trades.
  • I could have sold both for decent gains, as I usually do, but I wanted to push the limits.
    • On one trade resulted in a more significant loss, and the other resulted in a more significant gain.
  • Created a quick spreadsheet to track the progress of my paper trades.
  • Total Paper Trading Net Gain Today: $42.00
  • It seems the RZ cross-over patterns were a great way to capitalize on the opportunity today. Unfortunately, it failed to follow through on my TSLA trade but did have an excellent rejection, but it was very quick.
  • Let's keep paper trading indefinitely and focus on the RZ cross-over rejects and bounces.
    • There is a ton I need to test and refine.
  • ALWAYS MOVE FORWARD!




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