Tightening Trade Execution and Focusing on Reliable Setups
• Missed early entry on financial sector strength, with a discussion on improving speed in execution when key levels are hit.
• Refinement of ‘big ass fly’ strategy, narrowing the trade window to focus on early-session momentum instead of holding through midday chop.
• Review of premature exits, with trades closed before hitting targets due to overreliance on short-term pullbacks as exit signals.
• Shift in sector focus, deprioritizing energy after observed weakness and rotating into healthcare names showing consistent volume inflows.
• Implementation of stricter entry criteria, requiring alignment of trend, volume, and momentum indicators before execution.
• Reinforcement of managing trade emotions, particularly avoiding re-entry after being stopped out without a confirmed new setup.
Summary
the team reviewed execution speed issues, especially with missed early entries in financials despite price action confirming key levels. Ernie emphasized adapting the ‘big ass fly’ strategy to focus on capitalizing on early-session momentum rather than holding through less predictable midday price action.
The discussion also covered premature exits on several trades, with an overemphasis on short-term pullbacks leading to missed profits. The team agreed on shifting sector focus away from energy, which underperformed, and rotating attention to healthcare stocks showing strong volume.
To increase trade quality, stricter entry criteria were implemented, requiring full alignment between trend, volume, and momentum signals. Ernie concluded with a reminder about emotional management, discouraging reactive re-entries after stop-outs unless a fully validated setup presents itself.