Wednesday, January 21, 2009

Day 1 of a 2 1/2 day work week.

Things started off nicely for us with a tidy double topping pattern that went straight to target. I had to pay up a tick to get an exit (turns out I wouldn't have had to) but walked away with 3.75 in profits. Then I got a second signal to get short off another double top but this thing just EXPLODED away. I had my order in but didn't get filled as it ran down for what would've been another 4 points in profits. Oh well.

Then came an interesting scenario. I got a signal to get long (and I did). However that signal then turned into yet another double top pattern that was textbook and confirmed. So I reversed out of my position for a loss and then got short. The short obviously didn't work and I took a second loss. It was kind of a tough thing to take two back to back losses inside of two minutes, but the losses were relatively small and most importantly... under pressure of a live position I made the right call on reversing out and getting short. Yes, it didn't work this time, but i've seen it happen before and i'm sure i'll see it happen hundreds more times this year. I traded the method and the signals correctly under pressure. That's all I can do.

The next thing I wanted to mention briefly is the importance of understanding news releases and their importance when it comes to trading. First off... be AWARE of them. I specifically don't put on trades until 10AM EST everyday because of the news releases that are out almost every morning. Furthermore, there are almost every week fairly important news releases that come out intraday. Its important to keep track of the KEY releases that are going to move the market because you don't want to be in a trade ahead of them. Consider today - housing numbers were due out at 1PM EST. What do you think the pit is going to be doing 30 minutes prior to a news release they are all strategically positioned around? Think they are initiating new positions? NOPE. They are all sitting around the pit waiting for the release. Which means what to you and I? It means the market lacks direction and conviction in its moves and chop, fakeouts, and stop runs are the name of the game 9 times out of 10. As a rule of thumb I try and stay out 30 minutes prior to a release and 15 minutes after. Then its fair game. A great free resource I use is Econoday. Make note of the news events identified with a star, those are the ones you need to be aware of. The only others ones that might not be starred but are important are Beige Book and the FOMC Minutes.

I took one more trade on yet another double top setup and this one cost me 3 points. It was valid on both my 1 minute chart and my 620T, and I took it. It stopped out but that's just part of the game. I think the reason this one really lost was because the down bar that signaled me to get in was just such a big move... most of the move down that would've allowed me to get to par already had been already covered by the initial reversal candle. Oh well, this is just one trade out of the thousand I plan on taking this year.

Should be interesting to see if we can turn a profit on this essentially 2 day work week. I had today and I have tomorrow. What i'm NOT going to do is whine about "if I had just traded yesterday I would be up 300.00 and i'd be profitable this week". BULL! You take the results as they come and accept the outcomes of your actions. Friday I'm taking a half day as usual from now on and going to the Auto Show with the 'Pops as we do every year.

Trade Results:



E-Mini Player said...

P&L aside; good to see you got the trading psychology part down, and that's the most important element when it comes to trading success! rule of only taking Longs above mid-point; and shorts below has been keeping me out of trouble. Sticking with one direction helps simplify some of the setups as well.

Michael said...

Good execution!