Loss Analysis and Lessons Learned

Action Items

• When trading news-driven/trending topics, apply ICC using closer pivots rather than historical levels
• Remove "gaps always get filled" from trading bias — replace with "not all gaps get filled"
• When an ICC attempt has already occurred, proceed with more caution and use closer pivot targets

Overview

- This was a solo trade review of a losing US Oil trade
- The session covered lessons learned, strategy errors, and positives from the trade

Lesson 1: Markets Can Stay Unreasonable

- Despite expert consensus (including sources like Diary of a CEO) that oil reserves are depleting and prices should rise, external market forces such as midterm elections can suppress price
- Key reminder: "The market can remain unreasonable longer than you can remain solvent"

Lesson 2: Adjust ICC Strategy for Trending Topics

- Standard ICC approach: identify a holding price level, wait for a breakout, see price return to that level, and trade back up
- When a topic is heavily trending in the news (e.g., war, geopolitical events), this approach is insufficient
- Instead, focus on current price action: identify the prevailing swing direction (bearish in this case), anticipate a retracement range, and short from the breakout return targeting the daily level
- Rule: when trading trending topics, play ICC closer using closer pivots

Lesson 3: ICC Already Attempted — Proceed with Caution

- Price had already broken above 81.27, run to 93.50, returned, and partially played out ICC — but it stalled at a daily level and did not complete
- This prior attempt should have been a warning sign to hold off or trade more cautiously
- Additionally, the trade was entered partly on the belief that a gap would get filled — this assumption was incorrect
- Rule: not all gaps get filled

Positives — What Was Done Right

- Followed the strategy without deviation
- Took time to review the trade
- Correct position sizing — small enough percentage of account to sleep through overnight price movement without stress
- Maintained proper reward-to-risk ratio
- Patient — did not close the trade early for a small gain; allowed the strategy to fully play out