Zen Trading Tech

1. Intro
2. Setup
3. Session Starts
4. Problem Continues
5. Thoughts
6. Process

Intro

• In this post I share how my Daily short bias coming into the session almost lead me to make a big mistake scaling into a losing trade

Setup

DAX 40 – 13th November, 2024

• Daily Chart is a strong sell signal bar below the moving average
• Pre-Market is up but not quite at yesterday’s close – where I want to be a seller

Session Starts

• Bar 1 is a big bear bar – I feel I have missed my trade
• I carry this FOMO into the entry bar – which is a weak inside bar. I did not even realise it was an inside bar in my HASTE to enter by selling the close.
• Immediately going against me I SELL at Yesterday’s close.
• So I have take the trade I wanted to take – but in order to get out of a trade going bad.
• I manage to scale in to exit with a small profit.

Problem Continues

• I nearly repeat the same trade by selling the close of yesterday after I missed it.
• Now I am blinded to the fact that the sell is failing- in my urge to get in
• Just as I got filled I closed it and reversed to long – If I had tried to scale in I would have taken a very large loss- and missing the strong bull breakout.

Thoughts

• Biases are good until they are not.
• Had I WAITED, I could have watched my trade come back to zero and then calmly reversed on that bar or the follow-through.
• There are always AT LEAST two sides to every trade.

Process

• As soon as you make a mistake MUST end this trade – either try to break even or hit close.
• Do not immediately repeat the same direction of that trade. Cool off. If you miss it, thats ok. You do not want a spiral of mistakes.
• Look at the OTHER SIDE that took advantage of that mistake – probably a 2:1 target.
• Now you can go for their target but will NOT get 2:1. 1:1 most likely.
• Wait for the next clear signal and take that.