10-28-25-consistently-loosing

Trading notes for 2025-10-28

TL;DR

Had the right thesis for a day 2 continuation rally after pre-market manipulation swept the globex high, but got over-leveraged on my long position and was stopped out at 11:00 during a second manipulation move. The market subsequently rallied and took out the high of day as originally anticipated, highlighting ongoing issues with position sizing and withstanding drawdown during correct trades.

Market Context

The pre-market session showed clear signs of manipulation as the market dramatically and swiftly took out the globex high of day at 9:00 AM. This type of liquidity sweep before the market opens often signals institutional positioning and creates conditions for potential reversals. Given this setup, I was looking for a day 2 continuation pattern where the market would initially drop at the open before reversing higher.

At the open, I identified level 2 data showing significant resting orders that could serve as resistance. My initial expectation was that the market would push higher to fill these orders before dropping, creating an opportunity to go short. However, the market dropped straight out of the gate at 9:30, catching me off guard.

Thesis & Plan

My primary thesis was built around day 2 continuation following the pre-market manipulation:

• Expected initial weakness at the open
• Planned to enter long around 10:30 AM after the morning sell-off
• Target was to ride the continuation higher and take out the high of day
• Identified the Weekly POC (Point of Control) as a key entry level

The plan was sound in theory - wait for the manipulation to play out, then position for the reversal continuation.

Entries & Exits

• Entry: Long position at the Weekly POC after the 9:30 drop
• Exit: Stopped out at 11:00 AM when the market made another push lower
• Outcome: Market rallied after my exit and achieved the original target of taking out the high of day

The timing of my entry was reasonable given the setup, but my exit was forced due to overleveraging rather than being based on a clear invalidation of the thesis.

Risk Management

This trade highlighted significant risk management failures:

• Over-leveraging: Took on too much size relative to account and risk tolerance
• Inadequate drawdown buffer: Couldn't withstand the second manipulation move at 11:00
• Position sizing: The leverage prevented me from holding through temporary adverse movement

The risk management approach needs fundamental restructuring to allow for the volatility and manipulation that's characteristic of these setups.

What Worked

• Market analysis: Correctly identified the pre-market manipulation
• Directional bias: Had the right thesis for day 2 continuation
• Entry level: Weekly POC proved to be a reasonable entry point
• Pattern recognition: Understood the manipulation dynamics at play

What Didn't Work

• Position sizing: Over-leveraging prevented riding out the drawdown
• Psychological resilience: Couldn't withstand the second manipulation move
• Risk tolerance: Account size or position size misaligned with strategy requirements
• Execution timing: May have been slightly early, though the level was logical

Lessons Learned

This trade encapsulates a recurring pattern that needs immediate attention. The analysis and market reading are consistently accurate, but execution flaws are creating losses on otherwise correct trades. Key takeaways:

1. Position sizing is everything: No matter how confident in a setup, size must allow for manipulation and drawdown. The best analysis means nothing if you can't stay in the trade.

2. Manipulation comes in waves: Expect multiple shakeout attempts. The pre-market manipulation at 9:00 was followed by another at 11:00. This isn't coincidence - it's systematic.

3. Account preservation vs. trade conviction: There's a critical balance between having conviction in a trade and preserving capital. Currently falling too far on the conviction side without adequate capital buffer.

4. Time horizon expectations: These manipulation-based setups require patience and the ability to withstand short-term adverse moves. The strategy needs adjustment to accommodate this reality.

The fundamental issue isn't market analysis - it's trade execution and risk management. Without addressing position sizing and drawdown tolerance, even perfect market reads will continue to result in losses. This is becoming unsustainable both financially and psychologically.

Moving forward, the focus needs to shift from being right about market direction to staying in trades long enough to be paid for being right. This means smaller size, wider stops, and building the account structure to withstand the manipulation that's clearly visible but still consistently derailing otherwise sound trades.