Navigating the Rollercoaster: Lessons from a Volatile Trading Day

1/8/24 Trading in the financial markets is often a rollercoaster ride, filled with highs and lows that challenge even the most seasoned traders. In this blog post, I'll walk you through my recent trading day, marked by unexpected price movements, strategic decisions, and valuable lessons learned.

The London Open and the Initial Spike: The day kicked off with a significant price dump at the London open, plummeting to S1 on the daily at 4723. However, the market quickly rebounded, rallying to RTX on the daily by the New York close. Despite the initial chaos, the day held promise. Little did I know that the journey ahead would be both thrilling and humbling.

Missed Opportunities and Strategic Entry: While the price spiked above its moving averages at the open, I opted not to ride the wave towards its R1 levels on the daily. My decision was rooted in the analysis of the Price Pressure Momentum (PPM) indicators on the 5-minute chart, which, at that .25 level, did not seem to be in trend mode more terminal value.

The First Trade and Unexpected Volatility: Entering my first trade at 9:50, I took a short position with the PPMs at their highest levels. However, the trade quickly turned against me as prices surged to 4752, triggering my stop loss at 4751. Undeterred, I re-entered a short position at 4750, only to face another loss as prices bounced off and hit my tight stop at 4755. Although there was an initial rollover of PPM 1,the hold of the second derivative should have confirmed the buy the dip trade.


Analyzing PPMs and Revenge Trading: Waiting until 11, I initiated my third trade at 4755. Analyzing the PPMs, I thought the market was ready for a reversal, but the trade ended in another loss as prices tested higher levels. Frustrated, I revenge traded, going short at 4761 with partial size and setting a stop at 4769. This time, the market swiftly moved against me, hitting my stop and resulting in further losses.

Lessons Learned and Moving Forward:

Reflecting on the day, I recognized the importance of being more aware of PPMs and understanding when they are in trend mode or reaching their terminal values. In hindsight, I observed that PPM 1 often sets up the trade, while PPM 2 confirms it. Moreover, even if PPM 2 is under both derivatives but close to a negative slope, it may test key moving averages.

The Need for Patience: One of the key takeaways was the need for patience, especially in allowing PPM 1 and 2 to set up and confirm the trade. Recognizing that impatience can lead to revenge trading and emotional decision-making, I am committed to refining my strategy and approaching each trade with a clear and patient mindset.

Conclusion: Trading is a continuous learning process, and every day in the market provides new insights. As I reflect on this rollercoaster trading day, I am determined to apply the lessons learned, be more patient, and approach future trades with a more strategic and informed mindset. The journey continues, filled with challenges and opportunities for growth.

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