Kendra’s Setup for a Tilt Day
Welcome back! Becky & Kendra created this podcast & website in 2023 to have a space to offer up our constructive conversations that might help other developing traders learn, grow, and feel supported, as these conversations do for us. In this episode, Kendra provides a recap of a day that was particularly challenging for her and walks us through how it all played out and the lessons she gained. Because of the nature of day trading, we think this situation will likely resonate with many of you! And as a reminder, when we get into some of our technical systems regarding our day trading in a Market Mamas episode such as this one, we want to be very clear that we are not offering trading advice or technical support for traders at this time.
The day Kendra talks about in this discussion is Thursday the 24th of October and for reference, she trades the Nasdaq futures index. To give a little context here, the previous day was a bearish trending day and Kendra traded her morning session well, and was in sync with sellers. She even bought a QQQ option PUT later in the session as Miss Market continued to sell off all day and there were many more lower targets. Kendra was very pleased with herself that day, especially considering that she’s shared before she’s naturally more inclined to seek out long opportunities. In addition to this, Kendra was currently on a 16 day winning streak and less than $400 away from reaching her 15k profit target on one of her accounts. Her momentum was so strong and she was feeling all types of CPT (consistently profitable trader) vibes, like she was in full alignment with her assignment! However, on this particular morning, Kendra did not recognize the real setup in time…
With all that previous day momentum, coming into pre-market on Thursday, the ON (overnight) session had just built value in the upper range of Wednesday and had a nice dynamic support and resistance from VWAP to +2 SD (standard deviation) band, but overall the market was so far within a very tight range. Initially, Kendra’s intuition told her it would not be a good idea to short unless the price broke the ON low. However, the market opened and price broke VWAP with momentum and went straight to -1 SD and her CDV was negative and looked to be supporting sellers. Then the price went back up to VWAP and chopped around there for about 10 minutes before rejecting and heading down again. So here Kendra thought she had a VWAP to -1 SD setup. With this setup, Kendra got short, but was stopped out to the tick when price re-tested VWAP one more time before she went right back down. This frustrated Kendra for sure. Next, she attempted two more shorts as Miss Market rotated back up over the +1 band, and it was just loss after loss at that point. Mind you, we have not left the ON (overnight) range and Miss Market is only trading tighter and tighter. To pour salt on the wound, after price looked to be holding VWAP for around 10 minutes, Kendra then decided to switch teams and go long. At that point, admittedly, Kendra was fully trading on emotion and in a desperate fix it mode. When she over-leveraged on that emotion, she got chopped up and spit out.
“The biggest thing is reflecting on market conditions, reflecting on how you trade in those conditions, and most importantly, reflecting on your emotions in those conditions, because different conditions bring different emotional responses to different rules in the market.”
~ Carmine Rosato
After her trading was done, Kendra was venting to Becky how she had such a strong premarket routine that day too! Which added to her frustration. In hindsight, if you look throughout Kendra’s trading history, at least over 90% of her tilt sessions are when we have very tight range mornings that do not favor her trading edge. NQ is known for how she moves. Even without a trending day, there is so much opportunity. But occasionally she will have extremely sleepy days and this day she only moved 166 points, compared to the 300-500 average range. Miss Market had a small ON range and never traded outside of that either on this day. Shout out to one of Kendra’s trading instructors, FP Queen, who always warns the community about potential choppy conditions and has said many times, you can treat ON session as an IB (initial balance), with breakout opportunities in either direction. To this, Kendra felt she clearly needed to continue learning this lesson and having yet another experience to help her better recognize and learn to manage this pitfall of hers.
Kendra fully recognizes that she struggles with scalping conditions and that doesn’t have to be a weakness because knowledge is power! But she has to continue to work on selectivity and understanding her own personal tilt triggers so that she can avoid those emotions that cause her to force things. There was an awesome IG reel that Carmine recently posted that really resonated with us and is very much the heart of this episode's intention. He said “the biggest thing is reflecting on market conditions, reflecting on how you trade in those conditions, and most importantly, reflecting on your emotions in those conditions, because different conditions bring different emotional responses to different rules in the market.”
As for the rest of Kendra’s day, after her bloody battle, she had an appointment to get to so she didn’t even have the time to be toxic and fully grieve her loss how she otherwise might have. Then when she got back, she decided instead of getting back in bed to cry, she would go for a run, an amazing choice. She channeled all her anger and frustration into that and ran a 5K at 8:34 average pace which is close to her best pace. She also went out and fully indulged with a 5 course lunch and two martinis because she’s still a queen even when she loses a battle. To keep it all the way 100 with you all, later that evening after homework and dinner, she did eventually get into her bed and cry, letting it all out, and went to bed early. When she woke up at 4:30 Friday morning, she charted, reset, recalibrated, and got her butt back up on the horse.
This day was most certainly an opportunity for a comeback. Kendra did nearly immediately get back on track, following her strong process and trusting her profitable trading edge. We’ve mentioned the book Mindset Secrets For Winning in another episode and yet another part that really resonated with us goes: “Failure is an illusion. Whether something is perceived as feedback or failure is key. Rejoice when you are met with obstacles. It is impossible to conquer greatness without error, if you're afraid to make mistakes, you’ll never succeed in a big way.’’
Thank you to everyone who is subscribing to our podcast, reading our blogs, and providing us feedback! It means so much to Kendra and Becky to have this supportive community and safe space to share our experiences as developing traders. We have learned over these past three years how easily our confidence can rise and fall based on our performance, but we are dedicated to showing up each day regardless. We know and want all our viewers/readers to know and own that we are all worthy of this pursuit and have so much more value to bring forth during this lifetime. We hope that you all will continue fighting the good fight and believing that whatever you feel called to do has already been given to you. Just keep working at it one day at a time, and letting all the beautiful pieces fall into place. Our best trading days are ahead! We wish you all the very best for your lives. Happy Trading!