One thing I always try and remember when running a firm is this: trading is not very easy. The margin of error can be slight between great trade and stopped out. The trade below is a spot on example.
I love how this trader keeps a PlayBook and then has taken the time to ferret out A+ trades from his PlayBook. It is terrific that he spots one of his favorite setups today in WAG. It is good trading that he places this in real-time. But the wicks got him. It happens. It can be sooooo frustrating.
I will offer a rule to perhaps help against a future stop out in a setup like WAG, but I do so not pretending that trading is easy. While we can make a teaching point here we should be respectful of this game and not Monday AM quarterback this setup into Trader Disneyland of all chops, in all trades, on all days.
If you love a setup, then give it more chances to work. In the example above, if WAG failed to hold below your stop level, with time and volume, you can consider reentering. As a trader learn to spot the difference between stop out wicks and the failing of a support level. This takes experience and real-time reps. When I love a level I will reenter, even after stopped out, more often than ordinary plays. I might give this 42 level 3 stop outs before moving on, or determining a safer and cleaner entry.
Tomorrow we can be better than today!
Mike Bellafiore
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