Monthly Recap: December 2024

December 2024 was a short month for me in terms of trading. With the holiday season approaching I have taken some time off to rest after a long and stressful year. I completed two sessions which produced a combined total of +0.31R. Here are the results of this month's trades:

• 2 December 2024
  • Trade 1: +0.50R
  • Trade 2: +0.01R
• 9 December 2024
  • Trade 3: -0.20R

I took two trades on 2 December 2024, which are shown in the chart below:

I started my session about an hour after market open. The S&P 500 opening candle saw large buying pressure after which the move was reversed as the session continued to form a trading range day. Price was making its way back up to retest the highs of the day at the top of the range. Seeing some rejection of these levels I thought we'd have an increased probability of revisiting the bottom of the range. After the low of signal Candle A was broken I opened a trade short at Position 1. My price target was near the lows of the trading range day.

After a very brief pause candle, price began to move towards my target. Price did eventually reach my target but, due to the bid-ask spread of my broker, it did not sufficiently cross my target line to get me out of my trade. Shortly after that, price reversed slightly higher. A second attempt was then made to retest the lows, and once again my target was reached but my trade was not closed due to the same broker spread gap. At this point I probably should have manually closed my trade but I did not. I really thought price would continue lower given the bearish pressure behind the move. Ultimately, the move lower was followed by a large bullish candle which took out my trailing stop loss (which was at least in profit by this point). I was quite annoyed with this trade. A few ticks lower and I would have tripled the outcome but I guess this is a lesson in itself. There is a saying that the market often tries things twice then tries the opposite. Perhaps I should have manually closed the trade when I was close to my target the second time instead of trying to squeeze every last tick from the move.

As the trading session progressed, price moved back up to the top of the trading range day. I looked for a potential break of the trading range to ride the move to new all time highs. Signal Candle B made new highs and once its high was broken I opened a trade long at Position 2. Shortly afterwards, the move then reversed back into the trading range then back out again. Price struggled to move higher which is not what I would expect if sufficient buying pressure was available to push to new highs. Eventually I did not get a good feeling from the move and I closed my position at break even. Had I left the position open, price would have returned to make new all time highs but not high enough to reach even half my target and I would have had to have closed the trade at a loss. My intuition paid off in that regard. Looking back on my entry the breakout to new highs was not the strongest of moves. This could have been a potential leading indicator of the weakness of the move to come.

My final trading session of 2024 took place on 9 December. I took one trade as follows:

I started my session while the S&P 500 was breaking to the down side, and it was about half way through this move. I recall watching prices fall and wanting to get in on the move but could not get myself to short it as I was not confident about any potential entries. As the session progressed, prices moved lower until they ended with a climatically large bearish candle and an immediate reversal. Given the strength of the downward leg, I anticipated another leg lower after a pullback. Prices eventually reversed with some strength into the 20 EMA and retraced almost 50% of the previous breakout. After the second rejection of the level by signal Candle A, I opened a trade short when its low was broken. I targeted the measure move of the leg projected down.

By this point my session was almost over. I had spent the whole evening watching price move very unidirectionally without presenting much of an opportunity to get involved, so I was happy when the market offered me a suitable entry. Prices slowly moved lower to begin with but then started rejecting downward pressure. As the move weakened, the large bullish rejection Candle B was created. Given that the long-tailed candles had ended and were replaced by a much larger upward move against my trade, my confidence in the trade was eliminated. As a result I closed the trade for a reduced loss and carried on with my evening.

After coming back later I saw that price continued lower but then ultimately reversed to a much higher level.

If I had let the trade continue into the evening unattended, I am not sure what the outcome would have been, since neither my stop nor my target would have been hit. I would have had to have closed it manually at some point, and since this scenario did not happen, I'm not sure what the result could have been. All in all, given the price action that occurred, I was confident in my rationale to close the trade.

With the holiday season approaching, I am taking a much-needed break, which brings my trading sessions for 2024 to an end. Overall, despite being cut short, December was a slightly positive month for my trading. In fact, for the first time in my trading career, I have ended the year in the green. I look forward to reviewing my performance since I started this journey in June 2024 and will likely do that in the weeks to come.

Happy holidays!

Until next time :)

~Alessandro