Today was essentially a trend day up. If trend day up is not identified quickly then it can inflict major damage to a traders account. My goal is 2 fold on trend day up. 1) To avoid losing money taking counter-trend trades that get run over. If possible, to get on board in the direction of the trend day.
I essentially did not catch the we were in trend day up quickly enough. My early short was stopped for -2.25. Small enough damage. I pretty much waited for my next trade to develop. Much of the problem with this particular day was it was deceptively slow. Most trend days have a speed element to them that was not present this am. My trading rules are designed to keep me from having major draw downs on any given day and today they worked perfectly. My second trade was a short at Initial Resistance & I sat in it for what seemed like forever. Unable to get a rotation to the down side I covered for a 2 tick loss. Totally respectable. I do not consider myself the best trader in the world, far from it. What I do do very well is control my down days and keep them small and I extract the maximum on my up days and only take my highest odds trades. Thats it. It has kept me in the bis a long time and I suspect it will stay that way.
Clues to trend day up:
no attempt at gap fill
little to no counter rotations
never got below VWAP
NQ went up from the get go, in complete oposite behavior of prior day and something my coaching clients were looking for out of the gate.
Hope all did well. Still considering weather or not I want to trade tomorrow. Everyone and their brother will be trying to get in on the action. The swings and the power of the move in both direction could be insane. Last time we had 20 point ES moves each way--within two hours Not exactly my cup of tea. I trade pretty leveraged. So for now I am going in with no expectations and with the attitude of doing less is more. I simply want to survive crazy days so that I can cash in on the easy days. I do not consider moves generated by interpretations of mid day news releases easy as I have little to no edge there. Everyone is gaming this and I want to make sure I am not the sucker. Good night, remember, market will be here a LONG time. Just make sure you are here with enough capital to take advantage of the easy markets. ---Simon
Trading of securities, options and futures may not be suitable for everyone and involves the risk of losing part or all of your money. Commentaries are educational in nature and are designed to contribute to your general understanding of financial markets and technical analysis. Use it how you want and at your own risk. I am not a registered investment adviser. This information is a general publication that reflects my opinion and is not a specific recommendation to any one individual. You must consult your own broker or investment adviser for investment advice. Controlling risk through the use of protective stops is essential