Executing on High-Probability Setups and Sector Rotation Adjustments
• Delayed reaction to early tech sector breakouts, with action steps discussed to improve readiness and execution speed off the open.
• Refinement of the ‘big ass fly’ strategy, shortening the holding window to take advantage of quicker momentum reversals in financials.
• Implementation of stricter trade entry criteria, requiring higher confluence between moving averages, volume spikes, and price structure.
• Review of overtrading tendencies, especially during midday sessions when market conditions became choppy and setups less reliable.
• Adjustment in stop placement strategy, focusing on dynamic stops based on ATR (Average True Range) rather than static points.
• Sector rotation focus shifted to healthcare, after observing weakness in previously favored energy names.
Summary
the team analyzed execution delays on early-session tech breakouts. Ernie emphasized the need for faster reactions and maintaining readiness at the open to capitalize on high-momentum setups.
Refinements to the ‘big ass fly’ strategy were discussed, specifically reducing the holding window to better align with quicker reversals, especially in financials. The team agreed on implementing stricter trade entry filters—demanding clearer alignment between moving averages, volume confirmation, and structural support/resistance zones before executing.
A key point addressed was the tendency to overtrade during low-probability midday conditions, with a reminder to step back when the market lacks clear direction. Stop placement strategies were also adjusted, moving to dynamic, ATR-based stops to better reflect volatility rather than relying on static levels.
Finally, sector rotation analysis identified healthcare stocks as new focus areas, while energy plays were deprioritized due to consistent underperformance.