S&P May 19, 2023 Trading Results: +$110 PNL

May 18, 2023 Summary

Plan Recap

Short Perspective

Coming into the open, my plan was to take the short trade from 4156 down to 4133 if it presented itself. I got this gap lower but unfortunately I was not at my desk to take the trade (day job calls).

Long Perspective

I had a long bias in my previous post given the price action at the close on 5/17 and the moderately positive news in the overnight session (Asia Markets higher, NZ Treasury cancelled their anticipation for recession, initial jobs claims etc).

In preparation, I planned to go long a breakthrough 4182 provided it held after being tested targeting 4192 and 2408.

 

The Open

/ES chopped around 4167-4172 through the evening session before violently gapping to 4128 in the premarket session around 8AM CST.

By noon, /ES filled the gap up to 4177 where it traded around a 24 point range for the early afternoon.

 

Summary

In the noon/early afternoon I fell into the habit I'm trying to break where I allow myself to get pulled into trading chop. This is best illustrated by the time series of my PNL visualized thru the day below:

broken image

Unsurprisngly, my trades where I followed my plan are the green sections from the morning and last 2 hours of trading. After 11am CST, I let myself get goated into trading the chop from until 2pm CST. Thankfully I kept my size small and did this with 2-3 lots of /MES (micro eminis) so the damage was below my stop loss of $200.

At 3pm CST, we saw a clear break and hold of resistance of the 4192-41202.

  • I went long a single contract of /ES at 4202.25 targeting 4208.
    • Outcome: Price action began losing steam around 204 so I took profits at 4203.25 for 1.25 points.

After this trade i wanted to wait to see a new high and a pull-back before getting long again.

We gapped further up to 4210, I was targetting 4205 for a reentry on the pullback but I made a mistake and hit the wrong button on my DOM and immediately reentered at the top 4210. I scratched that trade immediately at a 2.25 point loss due to violent pullback.

I got long again at 4204.50 and road the wave back to 4206.75 for a 2.25 point win, erasing my fat finger mistake earlier.

Once we bounced at 4206 and reclaimed the 4208 level- I was looking to get long again since the market looked strong and we've been rangebound for the last 3 weeks. The market pushed forward and I got long again at 4207.75 targeting the next resistance range from 4218- 4220 from the previous August '22 support.

We came close but encountered selling pressure at 4216.75. I cut the trade at 4215 before the close for a 7.25 point gain on /ES.

 

Closing Thoughts

broken image

Had I stuck to my plan, I would have seen a substantial profit for the day but the marginal trades I made on /MES during the mid-day session as well as my DOM error gave back a substantial portion of my profits.

My win rate sits at ~43% which is about what I've been averaging since April. It's improved from 26% when I starting to trade futures in March.

Despite my many self-inflicted set-backs in today's session, I am seeing my largest and AVG winning trades are heading in the right direction relative to my largest and AVG losers (underlined in blue above). I'm getting more disciplined about:

  • Not averaging losers with size
  • Cutting losses at my predefined stop loss of 4 points

I've noticed due to the differences in contract size between /MES and /ES, psychologically, I allow myself to get sloppier with my entries on /MES. This is most evident in my win rate when you segment my trades by contract:

  • /MES 5/18 win rate: 39.1%
  • /ES 5/18 win rate: 60%

My two biggest weaknesses I want to focus on these next few weeks are my susceptibility to chop and overtrading. I am going to take a more diligent approach to time my entries. Before I add more funds to my account, I want to see a month long win rate of 55-60% with no losses beyond my max pain stop loss.

 

 

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