Plan The Trade
Last Friday, the pre-market was somewhat bearish. I identified two stocks to buy, and if the market remains bearish, I may short the QQQ at 573.84, with a stop-loss at 574.43 and a target profit at 572.66. I risk a maximum of 0.5% from my $10k paper money (not real money) account. By the way, I am still on the journey for 100 paper trades before I decide whether I am ready or not for live trading.
Trade The Plan
Ding ding ding, the market opened, and it started to go down. Approximately 9 minutes later, it breaks below pre-market support of $574. I’m preparing to place the order if the next candle [label A] closes beneath the support line that has now transformed into resistance. Then at the end of that candle, it closed back up, and I see it as if there were buyers. I observed [label B], where two bullish candles rose to the resistance line on low volume, indicating it’s not a strong rally. Then a shooting star candle (bearish sign) appeared [label C], but I want the confirmation candle in the first panel. So, I did not transmit my order.
Then once the next candle still closed below the resistance line, and it was a bearish candle. I’m prepared to make my move if the price increases with low volume back to my entry level. But the price action continued to go down and eventually hit my planned profit target.
Trade Review
I’m glad I didn’t feel like I was missing out too much; I focused on the process rather than the profit or loss. I thought for a moment about how great it would be to hit my profit target and enhance my August results. But I stopped that thought, as that is focusing on the outcome, which is not the right focus. I must focus on the process, so I will not feel emotional in my trade execution.
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