What a Day

Sorry, I'll have a quicker than normal post for tonight.

Summary Trade Review

I got off to a really bad start today. The first couple of trades I wanted got away from me. The first was an early short at 1511.00 within the first 15 minutes of the market being open. Then I was really interested in a long near 1509.00 to 1508.00 area. You may remember the 1509 area from earlier posts. I have let too many trades get away from me that were in this area.

Well... To make up for mentally missing these trades I started trying to call the top. I quickly dug a pretty big hole for myself.

I eventually saw the light and got long at 1514.00 shortly after 9:00 CT, not a preferred entry, but better than trying another short. The market quickly went a point in favor and stalled. I took the first half off as this was not a "good" entry price and had a high probability of hitting my stop even if the market continues higher. I got lucky and harvested 3 points off of the second half.

Believe it or not, but I'm still in the hole. :-(

Then I went for a short at 1518.00, I should not, but the signal was too good not to try. The market tried to get me to bail, but I held on. As a counter trend trade, I took the first half off at +1 point, then I captured 2 points on the second half. Hey... I'm back positive on the day, but need to pay commissions still..

Then I got stupid again, took some "poor" signals. Both a long and a short and dug back into the hole again. This exchange made me miss the second drop just before 10:00 CT. I did catch the pull back and scalp a point back to the swing low around 10:12 CT.

Then I felt the need for a couple more "dumb" trades. I really need to stop this to get somewhere, other than back into the hole again that is.

I stood aside for a little while to better figure things out. Hey, I think I figured it out, we are going back down. So I doubled the contracts. the bad news is I did not get a "good entry" again, I'm short from 1513.75 on the Jump-on entry.

I tried to hold on to all the contracts. As price approached the 2 point target for the first half position, I moved the stop to 1 point to make sure I harvested no less than that. Well, the stop took the first half off at 1 point. For 1 minute, price touched the +1 point stop but went no higher. A looser stop would have allowed more profits. :-( The second half was bumped out at +2 points. All on double contracts. I would have been done favor the day at a max stop loss if I was wrong on the direction. There were signs earlier to get short above 1516, but my head did not clear fast enough.

Had a couple more trades where I lost a little and then made it back. Saw what I thought was the "next ledge break" forming after 1:30 CT. I decided I needed to stop as I was getting "too wild" with my trades.

How I felt

I think I revenged traded early today. I can tell you that it did not help, and I'm sure I can say that it hurt in several ways.

1. Making bad trades starts to wear at your confidence.
2. Then you start questioning the next signals when you should be reacting to them.
3. Breaks your Discipline and snow balls into more bad trades.
4. Get some bad trades that eat into profits (or make losses)
5. May get some winning trades, but entry is later in the move and not a level that can easily be held for larger profits.

Lessons Learned

Too many of my trades today were of the "jump-on" variety. This is where I see a move starting and I try to join it as early as possible and risk that price may make another stop run higher or turn and reverse directions. I have two stop choices here.

1. Tight, will be hit if price does not reasonably continue.
2. Loose, Risking a larger loss if I'm wrong on the price direction.

While several of these trades worked for nice profits, many others also produced losses that made today not very good of a day. Since price kept moving today I was able to "earn my way back" again. Without these moves, it would have been a different story.

I did figure out some signs using the Volume Break Down Delta, or difference between trades on up ticks minus those on down ticks, that helped me stay in some of my winning trades and should have had me bail on the position that turned into losers. I may end up doing a post on that sometime by itself. I'd classify it as more of a scalp entry where some profits would need to be "taken off the table" to lock in profits and additional contracts could be allowed to run for more profits.

Trade Wise, Trade Well
John