Tuesday, February 17, 2009

ES Trades 2/17 - Reset

ES 10min, 5min & 1 Hour

Yet another day of chart watching for more than 10 hours in anticipation of a bottom.

ES was moving down slowly in no definitive pattern during the Asian hours, making selling while waiting for the anticipated bounce from support extremely unfeasible.

When ES finally broke below 797.5, I made my first move going long. I expected ES to do at least a fib 38.2 retracement. That was 2 hours before US session started. I made a quick exit after taking 0.5 point, coz the tape wasn't doing what I expected it to do.

Entered a few more times subsequently, scratching 1 trade and taking very small profits for a few before hitting a micro homerun.

For my last entry (the micro homerun), I remember telling D that the bears are getting carried away, and I'm bailing out of my short position.

Bear trap, I said.

Shortly after, when I returned from my break, a perfect hammer with its tail touching 786.75 had formed on my 10min chart.

I decided to wrap up for the day. If there's anything that I've learnt in the past 2 really trying months, it's that if the market is my friend, it's the one taking the lead, and I'll avoid a lot of heartache if I'd just take in whatever information it's giving me and forget my own targets and wants. Today's a choppy day, and I'm not going to force any more trades.

My little experiment last week has caused me exceptional pain, but one that I needed to go through in order to eliminate the last trace of ego in me.

Prior to this costly USD1,250 lesson, I had been achieving consistent results - albeit not entirely impressive ones - and I had done that by staying nimble and humble.

I'm moving on by returning to my roots, and trusting my old scalping ways.

My charts are still roadmaps I can't do without, but I base my entries and exits strictly on the behavior of the tape. Once US session begins, I ditch my 10 min chart, and focus only on patterns on my 1min chart and the tape. I go long at offer and cover at bid, and sell short at bid and cover at offer. Once I'm in trade, I do not care about the entry point and focus on my exit instead.

I'm resetting the clock and making today the first day that I trade my usual discretionary method (which I have been doubting for the past 2 months, and I really want to kick myself!!), and I no longer doubt the wisdom of aiming for small, consistent daily gains in a chaotic market .

I believe now in letting the home runs come to me, and I know they eventually will, as long as I continue to focus on perfecting the way I trade.

I will continue to plan my trades, and trade my plans - which I'll need to improve on to include contingencies.

My exit targets will remain just targets - they do not determine when I get out.

Specifically, my exits will be based on momentum, as they've always been. That has proven to work for me time and again, and whenever I attempt to do something different (out of impatience and greed), I fall really hard.

My trades today: USD 125

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