Navigating the Rollercoaster: Lessons from Wednesday's (1/17) Trading Session

Wednesday's trading session was a rollercoaster ride, marked by significant price fluctuations and strategic decisions in response to market dynamics. In this blog post, we'll delve into the day's events and explore the valuable lessons learned in the process.

Early Morning Fade and First Trade: The London open set the tone for the day as price faded from its highs at 4784, plummeting to 4760 by the New York session's start. Notably, the opening price landed between S2 and S3 on the daily chart, emphasizing the bearish sentiment. Despite the hourly PPMs signaling a potential recovery, the 5-minute chart revealed a mix of upward and downward pressure from PPMs 1, 2, and 3. Entering the trade at the open, I opted not to set a tight stop loss, learning from previous experiences. While price briefly hit a new low at 4758, I stayed in the trade, considering the hourly PPMs' potential V-shaped recovery and PPM 3 starting to bottom out. As price bounced above its moving averages on the 5-minute chart, I took profits at 4772 right as PPM 2 was hitting its peak value. (The picture to the right is what I saw to confirm the trade)

Selective Profit-Taking and Midday Reflection:

Choosing to exit at the peak of PPM 2 instead of PPM 3 proved strategic, given the subsequent rollover in price from 4775 to nearly a new low at 4760. Stepping away from the computer in the afternoon, I later observed that price dipped to 4745, aligning with the STX on the daily chart. PPM 3 hit its peak value, barely positive, while PPMs 1 and 2 were under both derivatives in a negative slope. This reinforces the importance of considering each PPM's projections and the overall market context.

Missed Opportunities and Late-Day Momentum: In the latter part of the trading day, opportunities emerged as price bounced from S3 at 4760. PPMs 1 and 2 started to rise above both derivatives, hinting at a potential positive slope. The first half-hour of the last hour of trading saw sideways movement around 4760. As price accelerated to 4764, all three PPMs were getting over both derivatives with a positive slope. However, the momentum was not strong enough to enter a trade, given the PPMs were not in full trend mode. Later, as price surged to 4770 close to the market's end, the PPMs finally shifted to trend mode, emphasizing the importance of waiting for a clear trend confirmation.

Wednesday's trading session provided valuable insights into the complexities of market dynamics. The day showcased the importance of adapting strategies to varying timeframes, carefully considering each PPM's projections, and patiently waiting for trend confirmation. As the market constantly evolves, continuous learning and flexibility remain essential for navigating the ups and downs of trading.