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@ShakePryzby1 post about making adjustments..
Qullamaggie once said that the real edge, and challenge, lies in being able to adapt
Out of curiousity I also checked how Shake's adjustment would effect Qullamaggies trades in raging bull market.
76 of the 255 breakouts that traded at +4R still ended at or below the buy price using the 10 day SMA exit..
Selling half at 4R and trailing the rest turned all 76 into winners.
The average trade still dropped from about +1.20R to +0.93R.
Making Adjustments:
"The fact is this market is a Trader's Dream and a Swing Trader's Nightmare."
Recognition of the underlying environment is the utmost important aspect in trade management for me. I spent Friday and most of the weekend maniacally going over all of my trades in the chop. What I was consistently finding was my entries were giving me traction - but I was constantly giving 4-5R winners back breakeven. The major adjustment has to be quickly trimming winners and not caring if they go higher without me, because the data is showing me that more often than not, they are coming right back at me.
"Sometimes I am taking advantage of the volatility in buying shakeouts, sometimes I am getting taken advantage of in holding too much size for a swing."
OK - I need to keep focusing on buying shakeouts, but I need to scale out of these things when they begin to look pretty.
Came into the day looking to buy the semi puke - not for a days long swing trade - but to manipulate an inefficiency the market is offering. If you noticed last night into this morning on this app, the crowd couldn't have been more pessimistic. This is when you buy in this market. Sell when they're excited again.
$SMH closed way overbought above its 5ema at $632.50 just 5 sessions ago. Coming into the day, it is opening below it's 50 day at $578. If I am short semi's, I am looking to completely cover that trade into this morning's weakness. This lead me to have conviction in a semi long.
So instead of SMH I wanted to buy the best semi coming into a support level which was $AMD, which was retesting its prior all time high that it had not tested since it broke out.
So when AMD began flushing off the open I was buying small feelers trying to find a bottom, looking to really load up when it reclaimed intraday VWAP then give confirmation add through new intraday highs, which is exactly how it played out.
Now in most of my recent trades I was going up 4-5R and giving it right back. So my goal in this trade is not to execute a perfect swing trade, I don't think semi's look healthy in the slightest going forward -- but to simply take advantage of a market inefficiency.
So I began trimming 4R into prior day lows which was the first resistance. My target for the trade was only 595 into the overhead 20ema which may begin to act as resistance if semi's give up the bounce. I don't want to be apart of that trade, I want to be in and out, make my money on the opening bounce back. Get those first trims off, move my stop to breakeven, winning trade on our hands.
From there Q's nearly fill the gap in the first 45 minutes. This is my cue to begin thinking about exiting stage left. My goal in this trade is not some big market bottom swing trade, it's simply to buy an oversold bounce and sell it into strength.
So when that broad market selling begins, I completely sell my AMD into strength 592ish and lock in a ~4.5R winner. Surely not retiring off this one, but I wasn't putting myself in a position to give it back either!
This stock is higher without me, I don't care in the slightest because my goal of the trade was to just buy the oversold bounce, sell into strength, book some PnL, positively reinforce the adjustments I'm making, and leave the session with my head held high.
Maybe in the next efforts I only sell 2/3 and just keep a breakeven stop and let the rest run. But in real time I didn't have the conviction this and the Q's would actually continue higher seeing rates get bought up along with oil ticking higher. That is something I will determine in review.
For now, content with the adjustments in taking advantage of the shakeouts, trimming into strength better than I had been, and overall executing the choppy market playbook in a great opportunity with size.
All of your answers are sitting right there for you in your trade review. 🫡
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