Option Day Trading SPY and TSLA: 4/3/23

 

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 ISM Manufacturing PMI data as the high-impact news today at 7am PST.
• The markets have undoubtedly been strong.
• Let's see if we get continuation or a pullback from all the strength.

SPY

• For today, I have these levels marked: 
• Reaction Zones: 
• 409.50ish (yellow zone)- wait for a quick spike to the RZ for a reject or the cross-over for a bounce. Overlaps with a KL, so it might be interesting.
• 408ish (yellow zone)- wait for the panic for possible RZ bounce or the cross-over for RZ rejection. Again, overlaps with a KL, so let's see what happens.

• Key Levels:
• 410 (thick red dashed lines)- wait for the KL reject. The next KL is at 412.50.
• 407.50 (thick red dashed lines)- wait for the KL bounce. The next KL is 406.50.

TSLA

• For today, I have these levels marked: 
• Reaction Zones:
• 204.50ish (yellow zone)- wait for the spike for  RZ reject or the cross-ver for the RZ bounce. We do have an overlap with a KL.
• 201.80ish (yellow zone)- sort of a mid-level RZ probably just need to wait for cross-over events on here to determine direction.
• Key Levels:
• 204.50 (thick red dashed lines)- wait for the KL reject. The next level could be the previous close at 207.50 or 210.50.
• 200 (thick red dashed lines)- wait for the KL bounce but already at the level, so see how it reacts around here. The next level is 197.50.

RAW TRADING NOTES & COMMENTARY

• Got in on the spike up to the RZ and KL on SPY.
• above 410 is my stop and re-evaluation for price action
• I could have been more patient, but I feel antsy today.
• let's see if TSLA can make new lows and drag the SPY down.
• Goal is to sell on the KL test on the downside.
• Will be patient for that or re-adjust for price action if the trend reverses.
• I cut my losses on SPY.
• Re-entered for the cross-over... Didn't get the entry I wanted, so chased it.
• Currently managing trade...never easy.
• I tried to enter KL on TSLA, but now Fidelity is displaying an error on my option order window for TSLA.
• I restarted, and the order window still won't load...oh well, SPY is the better chart, though.
• Nice cross-over and bounce pattern on SPY. Let's see if we can get a continuation...
• TSLA dropping is not helping ...lol
• I got in too soon, so I could have managed my entry loads better 
• Was up about $50, but it seems like it will chop around my entry for now... never clear cut when I am in the play!
• TSLA is so disappointing.
• no bounce...kinda messing up my SPY trade...
• The market wants to go higher, and TSLA wants to go lower. So when we actually get a bounce on TSLA, the market will finally make the move I need.
• Took my profits.
• I exited my initial trade poorly and entered the adaption entry poorly. Lots of room for improvement here. But very clear that being able to adapt is the key to an offensive strategy.
• even though choppy, it holds the trend toward the variable change.
• It's clear the trend is going up, and if I didn't mess up so bad on the entries, I could have held or scaled out position for this trade since the next KL zone is far away.
• Yup, leaving tons of $ on the table.
• But I successfully adapted and profited.
• I will remain in the positive trigger cycle, even though I sold too soon; I want to repeat this because 100% dead on.
• Will take a breather and re-evaluate other opportunities shortly.
• It feels a little bit weird, but in terms of probability makes sense.
• When I needed to change from a KL reject to a possible KL break and bounce/re-test, it felt like this variable change favored a higher probability. I felt the pressure to up position size and an urgency to get in.
• This was my behavior, but it also indicated other factors.
• It will be interesting to be aware of this type of reaction etc., when I have more observations (n) of adaptive changes.
• Nailed the reversal on the 410 KL. Got in on the retest and sold on the push....quick scalp
• Combination of several setups.
• an intra-day RZ break, KL failed breakout, and support returned to resistance. 
• I most certainly sold too soon, but now that I clearly see how to adapt to my current levels, I am unlikely to have a bias now and am freer to go with the flow of the markets.
• absolutely freeing.
• sucks to be leaving $ on the table but absolutely on the right track, so I must keep this going!
• Even TSLA had a nice intra-day RZ break.
• TSLA pathetic bounces today.
• I will probably avoid playing TSLA today.
• waiting patiently for the 407.50/408 KL/RZ bounce for SPY
• Or possible cross-over KL/RZ reject at 410 for SPY.
• TSLA just no straightforward setups...too choppy...very different from last week.
• Got in SPY RZ reject...got in a bit early again!
• Needs to stay below 410 for me to stay in...then the new risk would be below VWAP 
• again, probably selling too soon, but I took a nice scalp.

POST REVIEW

• It was unfortunate that I needed to start the day with a loss, but I successfully adhered to my new goals/rules/mindset as the day went on. 
• I needed better risk management on my first play and more patience/better entry on my second play, but I was too excited for today.
• In light of my poor trade management, I successfully adapted to price action and found the market flow.
• The best plays were on SPY for the KL breakout and the KL/RZ breakdown. I played both of these.
• even though I captured some of the moves, I was 100% on the right track, so I am grateful.
• I need to repeat this over and over again.
• Looking forward to tomorrow!
• I am refining and optimizing my strategy.
• I like the direction my strategy is heading.

4/3/23: I traded the KL, but it failed to reject. So I adapted and traded the KL bounce with success! Also, played the RZ reject later in the day for small profits.


4/3/23: No trades on TSLA today.