Profit: USD 140
Shorted TF 8 mins after market open, meant to hold it for a while, but the lack of momentum made me cover at a 9 tick gain. Honestly, I wasn't upset when it finally ended up at 459, which was my exit target #1.
Coz I was already thinking about my 2nd trade.
I expected TF to bounce at 459 (which was why that was my target #1 in the first place), and saw no reason not to do something about it.
Both on 30 min and 1 hour, a hammer was forming. When it was completed, I figured that on 1min, what I was seeing could very well be an inverted head and shoulder. I gathered that both hammer and HS were bullish enough to send TF back up to at least 466, from where it should start plunging back down.
So I entered a bracket order, but got really clumsy (coz I usually use the booktrader, or simply enter at market), and watch a 2-point profit evaporate as I was keying in my order. Anyway, I entered a buy limit at 463.7, a stop at 461.5, and a sell limit at 466, and then just sat and watched.
At one point, I was looking at a profit of $200.
And then profit started shrinking.
By then, my finger was already on the sell at market button. But I decided that I had to at least make an effort at sitting...
I continued to watch profit shrink.
My heart ached so bad that I needed aspirin. It was definitely more unbearable than looking at a 10 point loss.
It just doesn't make sense not to take profit. It also doesn't make any sense to take a 10-point, or a 5-point loss when you know that just like profit, it will get smaller with time, if you're basically right about market's direction.
So, I hit the sell button at 140. The head and shoulder pattern is almost busted (resistance above), and what was forming then was something that looked like a bull flag of sort. Since there's no telling if it's indeed going to be a flag, I decided to do what any sane person staring at the screen would do - I grabbed my profit and bolted.
I'm not thrilled to have given up my initial profits, but I'm glad I didn't give the market a chance to take out my stop.
When I returned from a brief smoke break, I saw that TF had indeed gone up to near 466 (I had covered at 464.2). And again, I felt nothing. I have no attachment to things that I've never owned. But for me to give up what was once in my hand - that's painful.
I'm most comfortable taking trades that have a potential profit of 4 to 5 points and I'm just aiming for whatever momentum offers - sometimes it's 2 points, sometimes 3, sometimes a few ticks. Bottom line is, I have a lot of buffer.
As far as stops are concerned, I'm still comfortable with mental stops. I trade a small contract size, and I'm getting consistent with blowups - they are almost always 7 points. On those occasions, I usually manage to recover my loss. Except on FOMC days!
What I really need to work on is my entry - I just have to be really patient and not rush into trades. Forcing myself to identify a pattern before getting in is how I'm keeping my itchy fingers away from my keyboard.
What I'm seeing is that we are trading in a symmetrical triangle of sort, and SPX can either break above or below it. I'm inclined to think that the 2 dojis (in red elliptical) should provide fairly good support, given the reinforcement from the demand zone beneath it (800 - 815). Even if price were to cut through it like a knife through butter, there's still support at the low of 741 on Nov 21. Just the way I'm reading my chart. Whether we get a bounce from there still depends on the way trends unfold daily.
Still playing the main theme of a breakout on the Descending Broadening Wedge (the blue trendlines). I tend to see yesterday's downward move as being merely a pull back...
