Out of curiosity, does the IRA allow you to buy SQQQ? Its the 3x inverse of the QQQ, so essentially shorting QQQ with leverage. I'm of course not wanting to complicate things for you, but since you say that you could have come out fine if you were able to short, perhaps you could have bought SQQQ? There is also QID, a 2x short, and PSQ, a 1x short.
Yes but too much trouble trading both at the same time, hard to fit it in and I don't hold SQQQ, can't trade around it.
Not sure what approach you were taking but if you were going long before that VLE thinking TR after that initial push up after the gap up open then that was not an environment for fading tops or bottoms of a TR because there was no trading range only a few bars of sideways motion. If your approach was to go long because of a gap up open thinking "PB then continuation" after the opening bar then that made sense to look at betting long except for the fact that there was no FT bar. That gap up IF IT were going to continue north should not have had a doji on the second bar after the open followed by a bear bar then a bull bar that couldn't make a high past the opening high. That larger bear bar (5th bar after opening bar) was without a doubt signaling to exit with a loss. Why? NO FT bar after the initial gap up. No resumption of the bullish open. No trading range. No further bullish pressure. One small bull bar that couldn't make it above the previous bars highs. Just a FBO on the open. Then comes that VLE bar that clobbers longs and where even a SL would not have helped. That is why I say if you got caught in the VLE it was not a normal but an outlier situation and you were trading long on a major news day making it even more risky. Regardless of what the pundits say news can have a bearish or bullish effect regardless of whether the news is good or bad and it usually causes momentarily wild swings. Nothing about PA prior to the VLE was an environment suitable for averaging down. 1) After the open there was no TR (only a few bars of TR behavior) which was profit taking from the gap up open) bit no established TR to use TR techniques. 2) There was no good FT bar after the opening gap. 3) there was no strong attempt by the bulls showing the bullish move would continue. One small weak bull bar. 4) That 5th bar after the opening bar was a give up bar. Bulls are exiting and new bears are entering. 5) It was major news day. I have many times stressed that the environment or context has to be conducive to averaging down. If it were not a news day and if I would have seen just one or two good follow through bars after the opening bar then I MIGHT would consider averaging down in a bullish context but more likely would just do momentum trading in the long direction. Instead it was a FBO on the open. That opening bar was a BO bar. All BOs have to have FT or they will be FBOs and price will go in the opposite direction at least for bit and sometimes for deep moves. That was a trap up opening move. Trapping existing longs. Trapping new longs that missed the opening push up. There obviously was a big enough imbalance on the books and a news day that was triggering a VLE and killing the longs. There are some lessons here to be assimilated concerning: PA reading News day Environment conducive to averaging down. Bad luck caught in a VLE and what to do? Hedge? Brooks does cover "trading the open"
Happy trading! Maybe scalping will work for you. You do seem adverse to trading using a margin account which in one sense is wise but in another sense handicaps you from using various scalping techniques among them techniques such as reversing when wrong utilizing doubling down to get back a loss quickly and of course missing out on shorting opportunities that are conducive to scalping. Good luck. Hope it works out for you scalping only long. Years ago I used to trade stocks long in a cash account. Had a hard time making it work. Would make a killing then get killed! Probably lack of experience and knowledge. Then I got me a margin account and took on scalping. It suited my personality better. We are all different and have different experiences we learn from.
It all comes down to what I am comfortable with. One of the Market Wizards said we all get what we want out of the market. So true. In sim my profits for trading R:R > 1 is >> scalping but very lumpy and I don't feel good doing that.
Great post @volpri @ironchef , have you watched Al's video course? A great supplement (or maybe prerequisite?) to volpri's work. Highly recommend it if you havent
You should really reconsider posting your trades for your mentor’s @volpri review and input. It’s the fast-track for mimicking his method.