Option Day Trading SPY and TSLA: 4/5/23

 

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

Note: I am changing my daily routine. I will not post premarket; I will only post at the end of my trading day. I have been getting up at 4am PST to start my day but will now get up at 5am daily. Making some changes to hopefully get me on a better routine. Also, I will be decreasing my position size to $500 to better manage my trades. Quite frankly, I  am pissed with not just my performance but the circumstances surrounding when I do increase position size and that my average gains are just not good enough as I rarely capture the gains I need to propel myself forward. So going to use this new schedule to make improvements for the better. Getting more rest, doing less busy work, decreasing risk so I can be more involved in the moves I want to be. We will go from there.

PRE-MARKET PLANS

Market News

• It looks like we have ISM Non-Manufacturing Employment PMI as the high-impact news today at 7am PST.
• The markets have undoubtedly been strong but are now looking to have a pullback/first red day.
• Let's see if we get a continuation or further downtrend.

SPY

• For today, I have these levels marked: 
• Reaction Zones: 
• 409ish (yellow zone)- could have a spike for possible RZ reject, but on the watch for the cross-over.
• 407.50ish (yellow zone)- near the zone right now. Big KL area, too, so let's see if this will hold or will have a cross-over event for an RZ reject entry.

• Key Levels:
• 410 (thick red dashed lines)- wait for the KL reject. 
• 405 (thick red dashed lines)- wait for the KL bounce. 

Note: SPY is in a weird place in its chart as it does not have very clean resistance KLs. So it might be choppy. Finding the levels intra-day to better understand supply/resistance may be better.

TSLA

• For today, I have these levels marked: 
• Reaction Zones:
• 194ish (yellow zone)- wait for the spike for  RZ reject or the cross-over for the RZ bounce. We do have an overlap with a KL.
• 190.50ish (yellow zone)- wait for cross-over events here to determine the direction.
• Key Levels:
• 200.00 (thick red dashed lines)- wait for the KL reject. TSLA can't seem to hold above 200 whenever it manages to go over...
• 186 (thick red dashed lines)- wait for the KL bounce.

RAW TRADING NOTES & COMMENTARY

• Got in  TSLA cross-over. More of an RZ break play, though...
• I will see if this can touch 188, and I will exit then.
• haha still couldn't let it even hit 188 already exited.
• Solid trade.
• easier to manage with around 500 in the trade.
• Yup hit my plan...I left 0.30 cents per contract on that trade....just not used to winning this quickly.
• Possible re-entry on the RZ reject if it can return to the RZ.
• Same play possible on SPY for the RZ break.
• Feels kind of weird, but with a decrease in position size, I seem more free or fluid...when I increased my position size, it felt very restrictive, and that was very one-sided, like it needed to go in that direction if I put in that much size, so I had more bias. So now it is more like, let's see how the chart plays out. If wrong, just cut and go with the flow.
• Got in the 407.50 SPY RZ break...got in too soon, right at break-even... fighting hard for direction. A better entry would have entered on the actual bottom RZ break...
• fighting really hard...
• if it goes out of the zone, I'll cut losses...
• went out of the zone and cut it. I had a chance to get out for small gains, but I wanted to see what it would do.
• possible re-entry if it breaks the RZ.
• it sucks to give back gains, but I adhered to my plan.
• it seems like the 407.50 RZ will hold for now; possible retest later in the day.
• got back in the SPY RZ break...thought it would break...still fighting hard. 
• this is what I'm used to... getting screwed.
• about to acknowledge the variable change soon.
• if it can hold 407.50 will switch to calls...if it can't, I will keep my puts.
• got out of puts and switched to calls.
• Just will not break, so taking a hint and betting on the variable change here.
• will get out at a low of the day if wrong.
• still fighting so hard...was hitting my risk but still so much buying...
• Well, wrong here...losses adding up.
• Looks like I'm getting chopped around here.
• was right on the break but just took so long to break...I misread the variable change.
• possible re-entry on the RZ reject.
• it doesn't look like we will get it just going straight down.
• was right initially just was too difficult to stay in...
• Got in TSLA 186 KL for a bounce.
• The overall trend of the markets is clearly down, so I wouldn't be surprised if I get screwed over here, too...but it triggered my plan, so I'm going to see how it plays out. If it breaks 186 convincingly, I'll cut it.
• damn getting pummeled psychologically right now....sold for another loss...held too long.
• damn...today sucks more than yesterday, and I even took a tiny size.
• well, shit...tried to just flip and ride it down on SPY, but the moment I bought seems like it was the bottom. 2 solid green candles...
• No winning for me today....another defeated day unlikely for me to trade more now.
• my motivation is zero.
• I think I overtraded, but it is hard because I had the right ideas but got chopped up, then later relaxed on cutting losses fast because it seemed to be overexaggerated to be wrong so much.
• it seems like a regular big day loss even though I went smaller in size...all due to failures adding up.
• I might need to take a break from trading for a bit.
• feels too off, and motivation is shot now.
• So close, but so far...
• might need to use 1 contract going forward.
• confidence is shot now too...
• I know I will overcome this and succeed, but today and yesterday really sucks. 
• I see where my strategy works, but I am never in the right situation mindset to achieve it.
• I never seem to be in the majority of the move. 
• Sometimes, I catch part of the move or plan it but do not execute it.
• My issue is my psychology; it is hard to figure it out.
• Yup, I am making the decision right now. I'm only allowed to do 1 contract from now on. Going to suck, but I do not deserve to play with more money than that. I don't.
• I need to capture the moves I miss.
• Need to figure out a way.
• The path I'm on right now offers solid opportunities. Still, it's not enough to turn my chart around because it happens repeatedly.
• I form a decent trend going up and then have a sharp retracement down
• Not giving up!
• I am still missing something.
• After everything I have learned, I'm still pissed about my performance. My winning % is solid, yet $ wise, I'm red. WHY?
• I may be too hard on myself, but I may not be hard enough.
• One thing is for sure I am sick of this performance.
• I think everything I have developed thus far is excellent and sets me up to perform well. However, there is still something missing that I can't put my finger on, and it is something that can reveal itself once I start to just do 1 contract position size (100-200).
• I hate to go back, but there seems to be something very fundamental that I am missing.
• I need confidence, but building it incrementally over time and having big red days to wipe me out will not cut it.
• I need a better catalyst to boost my confidence. 
• Before, I would win nicely 20-30-50-200 % gains. That was nice! 
• Now it is like 2-10% max and with more significant losses when I do lose. But the winning % is there.
• I know if I just stick with the same position size over time, I could be profitable, but I am missing something huge.
• There is one more variable I need to figure out.
• I still haven't been able to get decent sleep either...need to work on that.
• Got in SPY RZ break with 1 contract. Set my stop
• I got out slight loss... that's all I can do...
• Even with a small size just feels horrible. I tried, and it didn't work...but now feeling like every trade I do will be a loss.
• Need to just start fresh tomorrow.
• Seems to be breaking down now...so still choppy out there; the other thing I could do is set a hard stop for trading.
• I have been more relaxed on when to call it a day too.

POST REVIEW

• More of the same.
• The pressure and negative performance weighed heavily on my confidence.
• It seems all the trades/tries I did this week were met with stiff resistance, and I could not catch anything.
• Very discouraging.
• I've been here before, and the road I seem to take from this moving forward always leads me here again months later. Something needs to change.
• I've been more focused on the stagey and refined aspects I was unaware of.
• For the most part, I have something great that I never had before.
• But still, the overall result is the same.
• I like my strategy and think it fits me well, but I have not discovered what I desire and need the most.
• It's like I need to discover the joy of trading the pleasure of my strategy and try to capture that every time...
• I think that is why I feel I must just use 1 contract....seems like time is the one factor that weighs me down.
• With 1 contract, I can give more time on my trades....not for the losses but at least for the winners to be optimized as much as possible; unfortunately, I cannot optimize my winners as I am progressing...just will not work that way for me.
• I need to optimize my winners now with a small size for me to move forward.
• Otherwise, I will keep repeating this larger performance cycle I always find myself in.
• So, moving forward will focus on 1 contract position size to optimize the opportunity.