Navigating the First Trading Day of the Year: A Symphony of Ups and Downs

As the markets welcomed the dawn of a new year, the first trading day brought forth a blend of challenges and opportunities. The landscape was marked by overnight fluctuations and intriguing patterns that unfolded throughout the day.

Early Morning Tumult: London Open and the Hourly PPMs

The day began with a plunge from 4826 to a stabilization point around 4780 at the London open. The hourly chart set the stage with PPMs through both derivatives and beneath its positive slope. Despite the initial red hue, early signs hinted at potential turnarounds.

The Opening Spike and the First Trade

Price surged above its 21MA and 10MA on the 5-minute chart, spiking through the 40MA at the market open. The PPMs projected a sideways trajectory with PPM 3 hinting at a negative slope. The first trade was initiated around 10:10, capitalizing on price being above its 40MA for a second time. PPMs teetered on the edge of positivity, but the trade encountered resistance, failing to reach the target of 4795 and triggering my stop at 4779.

The Short-lived Short Trade and Lessons Learned

A short trade unfolded at 10:40 at 4777, with price below its moving averages. PPMs presented a mixed picture, with PPM 1 trending positively, PPM 2 in a negative slope, and PPM 3 testing its first derivative with a negative slope. Unfortunately, the trade hit a stop at 4782, and retrospective analysis revealed missed cues for a potential bounce off S2 on the weekly at 4774.

The Ill-fated Third Trade and the Importance of Confirmation

The final trade of the day occurred with a short at 4792. PPM 1 hinted at a potential downturn, but the trade faced a premature exit. I was looking to take profits around the 21ma at 4782. Price moved sideways and under the 10ma, but not before ramping higher triggering the stop. Subsequently price fulfilled the profit target at the 40MA on the 5-minute chart at 4785 right after triggering my stop.

Reflections on the Day: Patience and Confirmatory Signals

In hindsight, the trading day unveiled a crucial lesson – the importance of patience and waiting for confirmatory signals. Early attempts to predict the market narrative seemed premature, and the lack of confirmation from both daily and hourly charts may have contributed to the challenges faced.

Closing Notes: A Symphony of Learning and Adaptation

As the symphony of the market played out on the first trading day of the year, the journey was marked by ups and downs. Each trade offered a lesson, emphasizing the need for patience, confirmation, and a thorough evaluation of overarching narratives before diving into the minutiae of intraday charts. As the year unfolds, may each trading day be an opportunity for growth, adaptation, and successful navigation of the ever-evolving financial landscape. Happy trading in the new year!



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