Refining Trade Execution and Managing Unpredictable Volatility
• Unexpected Market Reversals: Discussion on how sudden sentiment shifts disrupted trade setups and how to adjust for similar conditions in the future.
• Adapting the “big ass fly” strategy: Modifications to better handle sharp intraday price swings, ensuring quicker reaction times.
• Breakout vs. Fakeout Trades: Review of recent breakouts that failed to hold, with lessons on confirming momentum before entering positions.
• Scaling into Positions Safely: New guidelines for adjusting trade size incrementally rather than committing capital upfront in uncertain conditions.
• Using VWAP as a Decision Tool: Introduction of VWAP levels as a key factor in filtering good vs. bad trade entries.
• Avoiding Overtrading: Recognition of missed opportunities leading to emotional re-entries, emphasizing patience and discipline in execution.
Summary
the team addressed the challenges posed by sudden market reversals that disrupted planned trade setups. Ernie led discussions on modifying the “big ass fly” strategy to improve responsiveness to sharp intraday swings, emphasizing faster reaction times.
A key focus was distinguishing between real breakouts and fakeouts, analyzing failed trades where momentum did not sustain. New guidelines were introduced for scaling into positions gradually instead of committing full capital upfront in volatile conditions.
The use of VWAP (Volume Weighted Average Price) as a decision-making tool was discussed, providing an additional layer of validation for trade entries. The session also addressed the tendency to overtrade after missed opportunities, reinforcing the importance of patience and sticking to well-defined setups. Ernie concluded by emphasizing the need for disciplined execution and adaptability to evolving market conditions.