July 8

First off. Last week and again yesterday. I think I've been trying to fight who I naturally am as a day trader. I want to be someone who can hold for the bigger moves. But, I think I find scalping much easier. Just taking a high probability entry and sizing enough that taking profit quickly still moves the needle. Then letting a runner or two go. Where I run into trouble with this... just one runner can be in sizable profit and it feels irresponsible not to exit. In which case, I should consider simply rolling up. Anyway, embrace who I am. The process is still the same.

I still start at the higher time frame. I still wait for the 10m setup to actually present itself. Once the setup is visible and the HTF context confirms its likelihood, then I can zoom into the 3m to find the swing pivots to enter. Then, I can even go into the 1m to really understand support / resistance traps. Ideally I get in with some sort of divergence. Take the majority of the position off on the the rip and then let the market, market.

Why I may prefer scalping...?

1. Don't actually like taking on the risk without a fundamental thesis of long term outcome

2. Fine with exiting quickly because that's less time I'm exposed

3. I can get out quickly and not worry about how much I left on the table, because it just matters that I was able to collect

   
   

   I actually think it's less about scalping and more about confidence in a 1m entry.

This mornings scalp:

This morning was a pretty perfect example of what I'm getting confident and in spotting.

Hourly and 10m show straight sideways action. No real direction. But a clear range. When ranging, a hold of support is buyable with the right setup and vice versa for rejection of resistance.

Sideways choppy hourly chart

10m Chart. Defined ranged.

Off the open we immediately dipped testing the probing the premarket low. Initially we found support right around there. Which also coincided with the scalp -382 level. There was no clear direction we were simply probing down in the predefined range. We lost the scalp put off the open. The 2nd 3m candle probed lower but was held up by the premarket low and -382 scalp. The 3rd candle confirmed support at that level putting in a tweezer bottom.

In support of the thesis of having found support, on the SPX chart we simply were back testing the 3m21e:

On the 1m chart is where I focused on entry. Old me would've have chased into calls as price started to run away from me. However, with experience and patience and no fomo, I instead waited to see how price would react back at support, and only then consider entering.

We did exactly that!

Price rejected the put trigger and went down to retest support. At the close of the minute candle we held the previous swing low support and held the 382 level. I did NOT enter here as I was waiting for a breach of the low with divergence. Rather than a full breach we created an EL with higher PO. The premiums on the contract I entered dipped back to just above the previous swing low of $8. After the 1m bullish engulfing is when I entered for $10. Within minutes I was out the majority of my position at $11ish. Yes, only a 10% gain but it was a very confident entry that I felt comfortable sizing in a way that 10% still very much moves the needle. My best exit was at $12.2. So 22% on my best exit, and 50%+ from where I could've, would've, should've entered.

This is my setup. A clear reversal pattern off support. But, rather than chasing, waiting for support to hold a second time with higher PO level.

Old me would've chased and oversized into the first leg at $10ish, then stopped out at $8ish, only for it to rip without me. Patience is the ultimate key for entering. Speed is the key for exiting. Just take profit. Be content with the haul. No need to risk capital for an unnecessarily long time. Get in, get out.

And, here's how this Rishi is a scalper mindset has gone, so far. 5/5. "Smaller" trade returns, but larger portfolio impact. I have more confidence in this setup. I'm able to size. I exit quickly and still move the needle. I've been so focused on the trade return when in reality the portfolio impact is all that matters. "Small" wins on large positions are way better. Instead of fighting my nature I will embrace it and continue to execute against this.

High time frame setup. Clear levels of interest. 10minutes of consistent support (3 3m candles) and a 1m divergence at the previous swing low or high. Enter with a very clear stop of close below previous support or previous resistance and exit quickly :)

This is my style I guess. I don't like it for some reason, but it works. I'm going to stick with what works.

Even now at 2:45pm, there's no direction. There's nothing for me to do except wait to see how price reacts at the range limits. In between is noise. We're coming up on support now. Let's see if it breaks or holds. And, if it holds with divergence, that is a setup. But, it takes time for these setups to present themselves. And, if it breaks, how will I know and then what? Well, I'll wait for a retest of failed support and ideally there will be a divergence off that level as well! Let us see. I genuinely don't need to trade so I can just watch curiously.

Welp just when I got confident. I got stupid. Stupid. Stupid. I just did that bullshit last monday. Had a +5% day on the port. Traded it in for a -16% day. So dumb. Just take the rest of the day off. Or prove that you can just watch. Or prove that you can size small. WTF come on man.

More importantly what I did learn. My setup requires clear support and a move FROM an extreme PO zone. That's the only way to increase the likelihood of the huge green candle that compensates for the increased size. Ugh.

What's even more frustrating is I fully climbed my way out of the stupidity from last Monday. Up on the month. And then, back to pretty down on the month. I literally said "I genuinely don't need to trade so I can just watch curiously." I was not watching curiously. I was watching with the intent of making money. That's not what works. All my positivity I felt just two hours, gone. Green on the month. Potentially ordering more swag. Just felt very confident.

This game punishes confidence. It has to be caution, never confidence.

Having said that. I came back from stupidity in 4 days last time. If I focus on my setup. My scalping and being super clear what the setup is and how far to expect it to go. I'll be okay.

Where I failed this afternoon was expecting a big move up when we clearly rejecting the 3m ribbon every time. I kept playing for a larger move up, which is only likely IF were extended from the ribbon AND were coming from the accumulation level of the PO.

I can do this. I think I'm almost there with my setup. 1m double bottom off support with an extreme PO reading and 1m divergence. I've seen it enough. I can do it. I just need to be cognizant of the HTF context to actually expect a further move up.