"Control, control, you must learn control!" --
Friday was a classic battle between bulls & bears with bulls maintaining control all day in ES while bears made a valiant but failed effort to take markets lower. I reviewed the first half of the days trading action in the video you can find below the charts. At the end of the day, bears we forced to come in on ES as bulls never surrendered control and weak bears threw in the towel on NQ & it rallied up to the WHITE ZONE. From a trade perspective, I had a very good day. Why, because I did not allow my view (that we had a good chance for a downside push) to interfere with what the market was telling me. NQ set up as an excellent short opening up into the WHITE ZONE but never above. A short at or near the open was perfect trade placement. ES on the other hand opened above the WHITE ZONE. On most days I would have bought the first dip into the WHITE ZONE on the long side but I chose to pass as I thought the move up was a head fake caused by option expiration. Its rare to have complete weakness in NQ while there is a very strong ES. You will notice that even though I was leaning to the short side that I did not let that take me away from waiting for a set up in ES. Had I allowed my thesis to override my discipline (in only taking trades that set up correctly) I would have had a down day in my overall trading. Instead I had a moderatly good day.
That set up in ES came over lunch as documented in the video. It never yielded the rollover I was hoping for & in the end I was only able to scale half the trade for 6 ticks and lost 3 points on the second half. Net net a 1.5 point loss on the position as a whole. On the other side of the fence I was able to scale half the NQ short for 5 points and that let me move my stop to break even on the second half. IF we rolled over I would have been paid very nicely As it was, I was stopped on the second half for a 5 point gain. What I wanted to demonstrate in this mix was that while my thesis was wrong, my positioning was right and because of that I was still able to walk away profitably.
Lastly, & this is very important. I always stress that putting on trades in the last hour is VERY DIFFICULT to do profitably on a consistent basis & that fading markets at lows or highs in the last hour is a formula for trouble. The last 15 minutes of the market clearly demonstrate why. Short positions were run over. I did not see many traders calling for a long run at the end of the day. I did hear from several traders who were run over. All unnecessarily. Trading in the last hour is hard. Stacking chips in this time frame is difficult if not impossible.
Remember, all that matters as a trader is growing your account. You will never be on ESPN for the great trade you have & unlike professional athletes, you only get paid for the plays you do make and you suffer financially for the bad calls you take. Having to work for free on Monday because you traded like crap on Friday sucks. Stick to a winning game plan. Make sure you have an EDGE and develop a strategy to exploit the hell out of that edge. You only need 1 or 2 good trades a day to build your account. I assure you . Anyone can do it. Anyone.
Hope all do well tomorrow. I will see you all then.
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Notice: This Blog & its contents are intended to be for educational purposes only & not to be construed as trading recommendations in any way. You should not follow anyone blindly. Trading Futures & Options on Futures involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions are subject to change at any time.