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papageo
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Niko, To discuss your question in regards to fear: Here's the way I see yesterday's action (granted I was trading the ES, so keep that in mind). The market was digesting a strong down move from the prior sessions. Via SLA of the 60min chart, the bias had shifted (at least momentarily) to the bulls side [sL was broken and RET triggered after rejection of the mean of the daily chart upward trend channel). In fact, a hinge formed right at a prior swing point in the prior session's down move [which broke out to the upside]. So here's the start of the morning session. What do we know? Anyone with half a brain probably thinks there will be follow through after that strong sell off. BUT! The bias is currently bullish. The chart tells me so. [hypothetically] I'm a fearful trader and refuse to follow SLA. Even though the market is moving up I'm staying out of the long trade because I'm worried the market will fall and screw me [it's a trap!]. After all, that's what always happens. So instead, I look for a place to get short. Unfortunately, there is no clearly defined, major resistance level until higher up near the initial breakdown, so for the entire session, I have to sit and wait for a sign from the market gods to enter a short. And guess what, because there is nothing obvious to make me enter a short, I never do. For the entire session. Now think of me as a composite operator for the market. How would the market behave? It would float up, arguably very one-sidedly, AGAINST the directional bias of the market on low activity / low volume. You should also expect little to no downward overlap throughout the upmove since I [the composite operator] am unimpressed by your price rise and refuse to begin shorting, no matter how high your bull wave thrusts. At the open, there was some decent resistance, and so the only opportunity to short presented itself there. After the violation of that resistance, it was clear sailing up to a better shorting opportunity. That, to me, is the market's manifestation of fear in the form of timing - no one wants to be too early or too late. That market has already shown its hand with the strong selling spike, but now everyone that isn't already short is trying to jump in at the best possible price. Since the market opens well below any logical place for a good short, price just relentlessly rises.
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Goodoboy, the implication is that emotions can (and will) affect your decision-making process during trading. And, since emotions have a tendency to run much hotter while in a trade than when watching on the sidelines, you should really take care to not let them override your initial analysis. When in a trade where I have open profits, I will see reversals everywhere, causing me to exit at the worst possible point. When in a losing trade, I will see continuation moves everywhere, causing me to keep re-entering after my SL is hit.
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Back in at 1388.75. The short that shook me out did not provide any followthrough, and for better or worse, i am still looking for another push. In order to prevent repeated losses based on the same idea, this will be my last trade for the day.
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Good call. i'm out at 1387.75.
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Re-entered back to full size on a buy stop order at 1388.75. Target is 1396 on half. Moved stop up to 1387.00. Rationale: The slow trend upward has not showed signs of changing, imo. i'm looking for a strong continuation move late in the day and I think it could be getting near.
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Ninjatrader is free as long as you don't trade live from it, and you can adjust the playback speed from 1X up to a few 100X (market data is available to download after the market closes each day). I didn't watch an entire year's worth of data at 1X of course, I would vary it from 4-8X during volatile periods up to 20-30X during slower times.
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Good question. I am keeping an eye out for 1400, and instead of pushing the trade right to that point, I will exit the other half at 1398 (yes, that is arbitrary) if we get a good push. Otherwise, i'll probably exit on the next strong push (if it doesn't reach my target) or if my B/E stop is hit on a downmove. Edit: Here's my introduction post: http://www.traderslaboratory.com/forums/introduce-yourself/13794-hi-everyone.html
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Update on my previous trade: I took half off at 1389.25 and am letting the other half ride until around 1394. I feel my trade management is the weakest part of my trading approach, and I am currently working on scaling into/out of trades instead of holding all-in/all-out. Honestly, I took the first half off the table solely because I began to fear losing my gains.Taking half off and moving my stop to my entry point is my compromise to myself.
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I've been lurking this forum since January, and now that I am trading live I have decided to begin contributing to the community by actively posting. This forum in general promotes a positive atmosphere, which is refreshing. My methodology: I trade the ES with a 5min candlestick chart as my primary tool for entries/exits, and I'll jump from 30min down to 1min to help understand the market's action. I do not have a specific "setup" I trade. Instead, I watch the opening and try to develop a hypothesis of the type of day me might experience. Once I have a strong conviction, I then attempt to enter the market at a point that provides the minimum adverse movement to a price that would disprove my original idea. If my trade idea turns out incorrect, then I will wait until I come up with an alternative and then attempt to time a low risk entry. My market "ideas" are based off my SIM trading experiences, in which I went through all of 2011's and 2012's market replay data (some month's multiple times) from Ninjatrader. My trade management techniques are still a work in progress, and objectively they are the weakest part of my trading. I am still experimenting with a method for taking profits that suits my personality.
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Thanks. I've been watching the reaction off the prior high to see what kind of down movement we'd see. The slow, methodical crawl of prices slowly higher is leading me to believe we might have another grinding up leg. Full disclosure, these trades are on a live account, but I am very new to trading and hope people take my analysis with a heaping bowl of salt. I'll post a brief introduction in the appropriate thread outlining my methodology.
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I often lurk in this thread - I'll join in the discussion. Re-entered long at 1386.25.