1 May 2009

I just had to put this one in! It was an example of a complete lapse of discipline, and I was very fortunate to get away with it.

The entry I should have taken occurred in the first few minutes, but the market was moving very quickly and my reactions were too slow to catch it. I was furious with myself! Instead of doing the disciplined thing and going to bed, I watched the market for a long time, then took two (!) short trades, one of which worked, and one which didn’t. So I ended making a bit of money on the short side, on a night where the market rose strongly. 

When I come to review this trade at the end of the month, it will go down as a poor result, because I made a lot less than I should have done. So it will drag down the win to loss ratio.

Thank you to all who responded to my blog yesterday. Generally most of you were comfortable with moving away from the daily graphics, but would quite like a brief daily report. A lot of you asked for specifics of how I determine exits and entries. Frankly, I don’t include this each day because it is the core of the content in my book, and I hope that those of you who really see the value of this information will order the book. The entries in the book have been adapted slightly to suit 1 minute bars.

(The actual entries I use correspond most closely to those described in my old eBook, which is still available for purchase.)

But to give some idea of what I’m looking at, here is the 1 minute chart from this session.

As you can see, there was an enormous spike up in the first few minutes, which I missed! While I was sitting fuming about that the market moved up to challenge the high of the spike. Things were looking like this.

You can see how the market went sideways for quite a while as it struggled with resistance just before the top of the spike at 560. I could also see on booktrader that there were a lot of sell orders at 559.5 and 560, so I took a shot at selling at 559 expecting a strong pullback. (In the screenshot you can see my sell order at 559 with the stop at 560 – only one contract, as I knew I shouldn’t really be taking this trade!) You can see on the chart that the market did indeed pull back. Then, I was lucky enough to get my exit right at 553, just before the upward trend reasserted itself. 

Later in the session, almost exactly the same set up occurred again, but this time the upward pressure was too strong and my stop was taken out.

 

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