As I reviewed the equities market, it was clear that there had been a sustained upward trend for a couple of weeks. The day before, the S&P had made a significant push upwards, but reached a resistance level. Despite this, when I examined the futures market, I noticed they were displaying strength. I anticipated a minor pullback at the start, followed by more upward momentum, and started looking for long positions.
I came across ABNB (AirBNB) in my screener, and liked what I saw. Here are my notes from this morning:
This is another interesting one, and I think it might be worth it — especially if the market is in fact rallying. This had been pushing up strong since the beginning of the year, but peaked shortly after earnings mid-February. It pulled back from there, but since mid-March, this has made a new swing high, a higher low, and a subsequent higher high.
It’s pulled back again today, but it’s yet another higher low, and looks like a good opportunity to get in. I’ve already run the numbers and like them, and since I have 2 other orders out, too, I’m also going to take a slightly smaller position size with this one. Cheers. I, also, think I’m going to stop here since that will put me at 3 entry orders on the day, and I don’t want to be overwhelmed if all 3+ trigger.
Entry – $121.60
Target – $124.00
Stop – $120.60
R:R – 2.4
Entry – $121.58
Exit – $120.60
Price rallied enough to trigger me in to the trade, but less than 10 minutes later, dropped and stopped me out of the trade for a full loss.
I’m journaling this trade a few days later, and hindsight being what it is, I can see where I probably made a couple of mistakes here. Firstly, equities had been up very strong over the last 4 days, with a couple of gaps and no drops, so I should’ve been more prepared for a slowdown. Things were extended, but I must have gotten excited.
Secondly, my entry was largely arbitrary. Price retested a support area that was prior resistance, but was above that area when I looked at this — and not wanting to miss it, I “found” another entry. And, in order to maintain a solid R:R, I set my stop above that support-prior-resistance area (not that it mattered, because price pushed through that level, too, but still, I need to be more disciplined).
Ultimately, I rushed this trade. I was feeling extra confident, and because of it, I didn’t really take my time with my analysis, and tried to create something that wasn’t actually there. This trade also triggered a little after 9, which means I put the order in before that — which means I didn’t really let the market breathe before I started trading. Yet another mistake. If I’m looking to hold longer-term, I can’t keep letting myself put so much stock into the opening moves of the market. When I’m day-trading again, it’ll make sense to pay attention to the opening moves, but no so much for swing-trading.
So, here are the key takeaways: 1) take my time when doing my initial analysis. Don’t get too excited or cocky or overconfident — talk through everything I see. 2) When swing-trading, wait until at least 9:00am to start looking at equities and seeing how things are moving. I want a longer-term, smoother chart when swing trading, so I need to not focus on the chaos that is the open.