Trades demonstrating the importance of post-trade analysis, whether losing or winning.
ES Futures Contract
Market trending upward, with a strong bullish movement. Waiting for a pullback to the 20 EMA after the end of the movement.
Entry with 1 lot above the 20 EMA at 6794.50 with a target at 6815, beginning of the resistance zone at 6815-6830.
SL placed below the 20 EMA, therefore very close at 6792.25.
The price begins to rise then hits my SL.
Position closed at 6792.25.
Trade risk: 9.11R
Realized: -0.80R (-$90)
After re-examining the chart, I observe that the market has reversed and the price is moving downward. The previous trade was based on the continuation of the bullish trend and I misjudged my trend during my decision-making. The proximity of the 6793-6796 resistance that was broken should have alerted me. I decide to take the trade on a return to the 20 EMA with a target at 6777, the high of the support zone at 6771-6777.
Entry of 1 lot on the return to the 20 EMA at 6790.50. The movement took time to develop, perhaps showing a slightly premature position entry, but the movement eventually occurs and heads toward my target of 6777. Exit slightly before my target following a slowdown with a close trailing stop.
Position closed at 6779.50
Trade risk: 3.86R
Realized: 3.13R (+$547)
Despite the short time between these trades, I took the time to reassess the situation and understand my previous error.
One must never persist in one’s idea and take another trade in the same direction immediately after. One must also not enter the market to seek revenge, recover losses, or out of greed to make even more profit. When the trade is completed, we face a new situation and wait for a new signal. Here, I was fortunate that the signal presented itself quickly.
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