Monthly Recap: February 2025

February 2025 was another negative month. It was a tough pill to swallow and I think serious revaluation of my trading strategy and execution is in order. I completed two sessions which produced a combined total of -4R. Here are the results of this month's trades:

• 3 February 2025:
  • Trade 1: -1.00R
  • Trade 2: -1.00R
• 10 February 2025:
  • Trade 3: -1.00R
  • Trade 4: -1.00R
• 17 February 2025:
  • No trades (Bank Holiday - President's Day)
• 24 February 2025:
  • No trades (Personal time off)

My first session for the month took place on Monday 3 February. I took two trades as shown in the figure below:

For the second Monday in a row, the S&P 500 gapped down aggressively at the open. This time price moved higher to start, pulled back to retest the lows of the day, then shot higher with a large bullish candle which eclipsed previous price action. I started trading as the move higher was reaching the measured moved height of the trading range from which it broke out. Price was beginning to stall, and, once again given the large gap down at the open, I assumed we'd have some follow-through selling. After the outside signal Candle A rejected the move higher and took out the lows of the previous two candles, I decided to get involved. I opened a trade short at Position 1 after the lows of signal Candle A were broken, and targeted a retest of the breakout point of the previous range. It did not take long for my trade to get stopped out for a full loss.

A few candles later, price was struggling to break higher and was pulling back into the sideways range. After signal Candle B closed back down, I took it as a sign of a false breakout and when its lows were broken I opened another trade short at Position 2. Price moved sideways then slightly lower. It spent a lot of time in my negative territory but then eventually moved in my favour – but not for long. I held the trade through the remainder of my session and then left my screens after my session was over to continue the rest of my evening. While I was away, price moved lower but then ultimately reversed and stopped me out for another full loss.

Taking a -2.00R combined result for a trading session is a painful result to reflect back on. The market will do what the market will do but, in hindsight, I let myself down this session. After a few days of reflecting on my trades and performance, I came to realise two things. First, my analysis was too hasty and I was too early to the first trade. The second trade I view as a more valid setup. Second, I think I heavily FOMO'd my way into both trades, thinking that with the aggressive gap down we would be bound to reverse quickly, instead of waiting for stronger setups. Very similar price action happened last week – the weekend caused a massive gap down at the open. Price then rebounded higher, flattened out, pulled back a bit then moved higher again... and I was on the short side. On a positive note, I did succeed in sticking to my goal of holding my trades until either my stop or target is hit.

Mentally this session hit me hard. January was a negative month with only losses. To start February with another two losses in the bag deepens the draw down and starts to sting. Let's see what the rest of the month holds... Onwards!!

Unfortunately my next session didn't get any better. My trades for Monday 10 February are detailed below:

After a gap up at the open, the S&P 500 pulled back for four candles then started to move higher. I started my session as price was making new highs for day. During a pause of the breakout move I waited for a second leg higher after the three candle minor pullback. Signal Candle A formed after an outside bar and closed higher, taking out the highs of the preceding candles. Once the daily highs and the high of signal Candle A were broken, I opened a trade long at Position 3, targeting a measured move and resistance levels on higher timeframes. The trade originally moved my way before falling over without much of a pause and eventually stopped me out.

That's when mistakes crept in. Seeing a pause in price action near the open of the day, I tried to front run a rebound higher. I opened another trade long at Position 4 after the high of signal Candle B was broken. This trade was pure speculation in an attempt to catch a falling knife. I was trying to materialise signals that were not present in the hopes of seeing a move higher that would continue the bullish momentum of the day. Shortly afterward I was stopped out again. My urge to get involved got the better of me. FOMO, again.

I'm starting to struggle with the trades I'm taking and the level of discretion involved. I think I seriously need to revisit the drawing board, and revaluate my trading and the "setups" I'm taking. Discretion opens one up to multiple possibilities but chasing non-existent opportunities is the downside if not handled correctly. Given my limited trading time and sessions I'm drawn to this approach in the hopes of expediting progress and improvement when in fact the opposite occurs. It has been a weird time in the markets over the last weeks, given talks of tariffs, big changes and global instability while the USA transitions to a new presidency. Perhaps its time for an additional layer of rigidity and rules in my approach going forward.

All trading goes through its drawdowns but I think I'm beginning to stray from the path. The drawdowns seem to be caused by improper analysis and chasing price with mental fogginess instead of typical edge variation over time. Well, that's how I'm interpreting it based on how I feel and after reviewing my results. The struggle to hone in on my trading edge continues.

Given that 17 February was a bank holiday and on 24 February I did not trade due to family commitments, February's set of trades ends here. It was a tough month once again but it has given me some thinking to do. There's a lot going on in my personal and professional life and it may be time to slow things down while I work on adjusting and improving my approach.

Until next time :)

~Alessandro