5/20 Trade Dissection

This blog post will be about a failed trade I made on 5/20, I took a loss of 2.25 ES points.

Note: Entry markers are correct on the very first image attachment only. Attachments after that the entry markers will not be lined up due to the way Ninja stores its historical data after you close out of your chart.

This trade pissed me off because I thought for sure I had everything timed correctly. I thought the setup was very similar to a YM trade I made last week so that was my basis for the trade. Below is a side-by-side comparison with the 5/20 trade being on the right side:

-Price is bullish
-Makes NSH then comes down very shallow to test support before continuing higher.

There were a ton of buying wicks coming down to the demand zone (chart on right side) and once we closed back above the overnight high with a rotation bar I thought the trade was good to go. Clearly you can see this was not the case however as I was stopped out before it eventually ripped and made the move I was expecting.

So naturally I want to figure out what I did wrong and I see a few details that could have changed the course of this trade, that whole 'hindsight' thing.

1. On the YM trade, price did not close back below the level, it was defended by the bulls and then put in a rotation candle. When compared to the ES trade, price action did close back beneath the overnight high. While the ES did pop up and then trade back below the overnight high again before taking off, this might be one detail to keep in mind for future setups.

2. The pull back was not even close to at least a 382. The YM trade had a little bit of space between the price low and the 382 but big difference in that one is that it never closed back beneath the level. Notes in following chart:

3. See following chart:

4. Setting stop to below the demand zone would have kept me in the trade however that would have been more room than I wanted to give it. I thought with the wicks that I was fine setting the stop to just below the swing low.

5. Arguably the most important - notes on following chart:

All in all, a few different warning signs and better ways to have gone about this however this is why post-mortems are important.