Bust

The title says it all. I never really recovered from the loss incurred at the end of last week. Instead, I added to that loss on Tuesday. Nothing really to talk about there as the setups I go for just didn't work out. The real pain occurred on Wednesday when MNQ decided to rally non-stop.

As mentioned in a previous post, I'm often the contrarian. This means that I do fairly well if a session consisted of price trading around VWAP. When this doesn't happen, I get murdered. That's what happened today. Going into today's (Wednesday) session with previous losses, I am already closer to my total loss limit. And then this happened.

MNQ

This is today's MNQ chart, which also shows my fills. There weren't any mean reversion opportunities. This resulted in me getting killed as I repeatedly sold when price did a re-touch of the most recent high. While it may not look that way, it is more apparent in real time.

Naturally, this latest string of losses pushed me over my total loss limit as outlined by Topstep. This is entirely my fault. I also admit that I just don't have a methodology for establishing the daily trend. Price began rallying at the 9:30 AM EST mark and I didn't have any signals developed to help me form a directional bias. The only thing I can think of is to assume that price intends to go higher unless it trades counter to the open. Scenario analysis below.

If price is rallying before the 9:30 AM open, there are a few options:

1. Price drops after the open. We wait for a pause to establish a boundary - opening high and the post-opening low. If price goes higher or lower, this would allow me to assess the fractals as I normally would. This would result in a normal trading session where intra-day reversions will occur.
   
   
2. Price continues to rise after the open. If this occurs, I think it's safe to establish an upside bias until we see the first "dip." For today, there weren't any dips so it was entirely possible for me to enter a long position and then trail my stop loss. I do think looking at the initial fractal is key.
   
   
3. Price opens flat. There's not much I could do. If price opens in a tight range, I pretty much have to just wait it out and see how it plays out with the initial fractal. No difference here really.
   

With that said, the question is where do I stand now? I can either reset and pay a monthly fee to complete Step 2 of the Trading Combine again or not. I am leaning towards the latter. This doesn't mean I'm quitting, but rather focusing on FX until I have the capacity to expand back into futures.

In my monthly FX trading recap coming up, I'll go into more details. Essentially, March has not been a good month. I think I do need to focus a bit more on building consistency in FX before expanding into futures. The main benefit of FX is being able to trade at night, which is not optimal for futures. The ultimate goal would be to fund a futures account without the need to go through Topstep. However, my experience with Topstep has been positive as I did develop a mean reversion system that can generate positive expectancy. It's just a matter of reading the market conditions correctly. More to come shortly.