This video details the journey of a trading desk that recovered from a significant morning loss by shifting from emotional, predictive trading to a disciplined, process-oriented approach.
The Morning Failure
- The Mistake: By 10:00 AM, the desk had incurred a million-dollar loss on SPCX. The narrator admits they were trying to predict a top rather than reacting to price action (0:00 - 4:43).
- Poor Setup: The trade was graded as a 'D' setup because the stock was in a hard uptrend with no signs of topping, yet the desk chose to size up based on ego and frustration (3:10 - 4:16).
The Reset: The 120 Process
- To stop the negative feedback loop, the traders employed the 120 process (6:17):
- Label the emotion: Acknowledge the trigger and feeling out loud (e.g., "I forced this trade because I was afraid to miss out").
- 60-second pause: Remove hands from the keyboard and mouse to clear the mind.
- Asset Protocol: Return to the market with a fresh, analytical eye to identify clear setups (23:45 - 25:20).
The Afternoon Turnaround
- Disciplined Execution: After the reset, the team successfully traded a 'B' setup using a rubber band scalp, which brought them back to break-even (7:11 - 9:35).
- The 'A' Setup: As the trend shifted in the afternoon, the stock broke through the VWAP (Volume Weighted Average Price). The team identified a "puppy dog consolidation" and executed an 'A' setup with full size, resulting in a significant profit that turned the entire day around (12:45 - 20:22).
Key Takeaway
Success as a trader is not about being right on every call, but about letting the grade of the setup drive the size of the position. Consistent traders focus on their Asset Protocol—a repeatable framework for grading trades—rather than their emotional reaction to losses.
No comments:
Post a Comment