Day two over here of being tossed around by locals during a consolidation and boy do I feel frustrated. I think I know what is happening here—I have a tendency to hunt out and buy into consolidating stocks. The consolidating stock affords me the opportunity to clearly define the risk of my swing trade. However, my trading style intraday on the /NQ_F is different. I am not riding a position which can sit through the noise until a clear break emerges. My risk per trade is too tight for this. Thus, if a consolidation emerges my job going forward is to wait it out until an abnormal rotation takes place.
Otherwise I will keep donating my hard earned ticks back to the locals and robots. I am defining my edge here, real time, using small position size. I am happy to learn my methodology while it is still inexpensive. I feel closer than ever to a workable trading model here.
To anyone who desires to trade discretionary in any product, my best advice so far is to find out what works for you while trading SMALL. Also find out what is not working. Consolidation trades are not working for me, at least not while trading the 1 lot.
When I envision trading more size, I would have carried a unit into the consolidation with a nice scale in place. It would be much more simple to manage this position because my risk would be way below the consolidation zone as opposed to initiating fresh risk amid the consolidation. Do you see how the two trades differ?
Anyhow, here are my daily stats below. I dipped into the red today but spent most of the session confident in my methodology.
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I bought a Twitter weekly call early in the session, but when we fell out of the short squeeze, P-shaped profile I brought the risk back to cash. The rest of my book stayed the same. My DDD calls are not looking too hot, but I will see one more day of trade before acting.