Trade Breakdowns

TRADE BREAKDOWN #1:

asset: BTC
side: short
stop type: soft stop
result: +2.8r (trade closed)
level of interest - trend continuation

reasoning for interest:
trending move with invalidation being the new shorts whilst they remain onside.

Further context

Context of this move is that I was playing the ongoing local downtrend. Price had just broken down from a more local sideways piece of price action and was already looking down. With that said, price had then put in the daily low at the time within London session which on a Thursday there is only a 9% chance of putting in the daily low within that session, hence it made sense to look to fade any bounce that low would have given.

Now with that said, we have two factors in my favour in relation to context:
- the trend
- the stat of London low being tested again

Execution & Pulling the trigger

executed timeframe - 5m

- spike in volume
- trapped value area
- extended delta
- new longs opening within tva

Execution of this trade was based upon a spike in volume, trapped value area, extended delta, whilst all of this simultaneously occurring as we are coming towards the invalidation zone of the downtrend.

Invalidation - as discussed previously the invalidation on this trade was the region in which the new shorts mainly entered, on this trade I used a soft stop which is not something I use in most of my trades, rather than having a fixed stop in the books, I would manually close the trade if it went and saw acceptance above 34430 at the time. For those of you who regularly use a soft stop I must stress the importance of managing risk correctly whilst using this stop method, I still risked what I would if I was using a hard stop however I took the risk of if this trade lost, it would have been more a -1.3R rather than the fixed -1r a hard stop provides.

Trade Management

This trade for me had only 1 significant take profit of 85% and that was targeting that London low previously mentioned and continuing the trend. The reason I took off so much at the initial tp is due to the nature NY session could bring. Many times before I have seen NY session sfp London low, hence the tp was to remain flat heading into any external London session price action.

Beyond Tp1 - I ended up closing the remaining 15% quickly after I saw a potential bounce from London low being taken, in hindsight I could have held this for longer as it printed a lower high and just continued lower, but this was NOT traded in hindsight, hence I saw there could’ve been a potential reversal so I closed the remainder of the trade.

NOTES:

- I have hedged myself on Bitcoin until I see a sufficient reclaim of 35400. Until then I am remaining hedged with the idea of a larger failed auction in play.

- TPO charts on Tradingview, I’ve adjusted my workflow to mainly view TPO charts for ES & NQ correlations through tradingview rather than through Exo currently, this is only in relation to ES & NQ TPO charts.

ES TPO tick size - 4
NQ TPO tick size - 20

Monday stat for session likelihood for putting in the daily high ↴

Get to work and start stat collecting, again I will continue to share peaks into what should be getting done on your trading off days.