AbeSmith 7-27-07 YM

[AbeSmith 10]

Today was a very uncertain day IMO. The dow is down 1.54% at the close. I couldn't find any good setups because the volitility was very high, and so I didn't make any trades today but did pay close attention to the chart most of the day looking for something, but never felt comfortable enough to enter a trade. Yesterday the chart looked very clean. Lower lows, higher highs. Green candles were followed by mostly green candles, and red candles followed by mostly red candles. But today we had a very colorful and unpredictable chart IMO, compared to yestarday at least. On CNBC they were also saying that today had very high volitility and uncertainty. So I was not able to clearly determine the sentiment of the day, but now I see that it was a bearish day.

 

It seems that to trade in a high volitility day you have to have a higher risk tolerance. One thing that other traders have been advising me is that I make too many trades and short duration trades, and one reason that is is because I have low risk tolerance. So today especially I was reluctant to enter setups. I wonder if it was mostly me or if other traders also stayed away today.

 

[Blu-Ray 10]

On CNBC they were also saying that today had very high volitility and uncertainty. So I was not able to clearly determine the sentiment of the day, but now I see that it was a bearish day.

 

It seems that to trade in a high volitility day you have to have a higher risk tolerance. One thing that other traders have been advising me is that I make too many trades and short duration trades, and one reason that is is because I have low risk tolerance.

 

Abe

 

Just a couple of things for you to mull over,

 

Firstly you're still watching CNBC - and despite what you might think, it WILL put a bias into your head.

 

Secondly, there's nothing wrong with taking short duration trades, so don't let anybody talk you out of it, because yes, scalping does allow a lower risk tolerance. But this is the hard part, you have to have a prestine set-up where you're only going to take the higher probability trades, and this will ( should ) eliminate overtrading as well.

 

 

Hope this helps

 

Blu-Ray

[OAC 10]

Today's action was choppy, but the movement of the day was a

normal consolidation after yesterday's drop. In the morning,

the market rallied to test yesterday's POC, then at noon it went down to test yesterday's low, then the rally failed in the late afternoon, then it sold off hard.

There were numerous setups today.

What really gets me is that I normally look at intraday charts all day, don't

normally look at the daily chart until the market closes. I noticed that the

last 2 days had really huge volumes in the cash indices:(SPY, DIA, IWM...etc)

I wonder if anyone else has noticed this and what this might mean ?

I think in VSA terms, this market has a very negative bias. Wide range bars closed near the lower extremes, heavy volume, and one key support failing after another ? Any comments ?

[torero 10]

Today's action was choppy, but the movement of the day was a

normal consolidation after yesterday's drop. In the morning,

the market rallied to test yesterday's POC, then at noon it went down to test yesterday's low, then the rally failed in the late afternoon, then it sold off hard.

There were numerous setups today.

What really gets me is that I normally look at intraday charts all day, don't

normally look at the daily chart until the market closes. I noticed that the

last 2 days had really huge volumes in the cash indices:(SPY, DIA, IWM...etc)

I wonder if anyone else has noticed this and what this might mean ?

I think in VSA terms, this market has a very negative bias. Wide range bars closed near the lower extremes, heavy volume, and one key support failing after another ? Any comments ?

 

Support is in danger of getting wiped out one after another, especially for daily S/R. I usually go to weekly but best of all monthly S/R to find strength, stronger than daily or weekly S/R to find real areas of support, especially in this very bearish market.

[AbeSmith 10]

Abe

 

Just a couple of things for you to mull over,

 

Firstly you're still watching CNBC - and despite what you might think, it WILL put a bias into your head.

 

Secondly, there's nothing wrong with taking short duration trades, so don't let anybody talk you out of it, because yes, scalping does allow a lower risk tolerance. But this is the hard part, you have to have a prestine set-up where you're only going to take the higher probability trades, and this will ( should ) eliminate overtrading as well.

 

 

Hope this helps

 

Blu-Ray

 

Thanks Blu-Ray. It's nice to know that short duration trades can be made to work. As for CNBC, I guess it can make one biased or distracted. But I do find it useful.

[AbeSmith 10]

Today's action was choppy, but the movement of the day was a

normal consolidation after yesterday's drop. In the morning,

the market rallied to test yesterday's POC, then at noon it went down to test yesterday's low, then the rally failed in the late afternoon, then it sold off hard.

There were numerous setups today.

What really gets me is that I normally look at intraday charts all day, don't

normally look at the daily chart until the market closes. I noticed that the

last 2 days had really huge volumes in the cash indices:(SPY, DIA, IWM...etc)

I wonder if anyone else has noticed this and what this might mean ?

I think in VSA terms, this market has a very negative bias. Wide range bars closed near the lower extremes, heavy volume, and one key support failing after another ? Any comments ?

 

Looking at the 6 month chart I can see that the market is testing the major lows of the chart. It will be interesting to see what happens next week.

[AbeSmith 10]

Support is in danger of getting wiped out one after another, especially for daily S/R. I usually go to weekly but best of all monthly S/R to find strength, stronger than daily or weekly S/R to find real areas of support, especially in this very bearish market.

 

Thanks for the info Torero.

[james_gsx 16]

We closed at the .382 for the YM, the ES is within .50 and .618 for a retracement. I was just waiting for the YM to hit .382 and look for a possible bounce Monday.

 

Abe, I would strongly suggest to turn off the TV. I can't tell you how much that helped me, I got to see the market the way I saw it without anyone else bothering me. It's okay to have the TV on I guess, just turn down the volume.

 

You have market internals to tell you what the market is doing, I would suggest you take the weekend to learn how to read those internals and apply them to your trading. It's okay you didn't take any trades today because you didn't see any setups, that's following your plan and practicing sound capital management. But don't prevent yourself from trading out of emotion, that will just lead to emotion while trading and you'll wipe out your account.

 

I have noticed some progress, just realize all traders go through what you are and at least you have the balls to tell the world. I respect you for that.

[AbeSmith 10]

We closed at the .382 for the YM, the ES is within .50 and .618 for a retracement. I was just waiting for the YM to hit .382 and look for a possible bounce Monday.

 

Abe, I would strongly suggest to turn off the TV. I can't tell you how much that helped me, I got to see the market the way I saw it without anyone else bothering me. It's okay to have the TV on I guess, just turn down the volume.

 

You have market internals to tell you what the market is doing, I would suggest you take the weekend to learn how to read those internals and apply them to your trading. It's okay you didn't take any trades today because you didn't see any setups, that's following your plan and practicing sound capital management. But don't prevent yourself from trading out of emotion, that will just lead to emotion while trading and you'll wipe out your account.

 

I have noticed some progress, just realize all traders go through what you are and at least you have the balls to tell the world. I respect you for that.

 

Thanks James.

[brownsfan019 17]

Abe - please turn that TV off. CNBC is of no use to you now or in the future. Their sole job is to keep you watching so you watch commercials. That's it. And to do that, they have to sometimes hype stuff of that simply is not there. And like others have said, it can easily put a bearish/bullish undertone into your trading whether you realize it or not - Example: On CNBC they were also saying that today had very high volitility and uncertainty. So I was not able to clearly determine the sentiment of the day, but now I see that it was a bearish day.

 

So CNBC said there was uncertainty, but you later saw a bearish day. Obviously CNBC didn't have a freakin clue and as a result it looks like you just watched some nice action unfold b/c CNBC told you so....

[GCB 10]

The only reason to have a TV is if the YM falls 500 points in five minutes you can check to see if the world is coming to an end. Otherwise keep it turned off.

 

Oh, you can also watch movies during lunch, but make sure you have alarms set to signal trading opportunities.

[OAC 10]

Oops ! I am guilty.

The last time I turned on the TV was when the Dow had a sudden drop of

only 200 points. It turned out a small plane had flew into a highrise in Manhatten:eek:

[brownsfan019 17]

To me, even a plane flying to a building is not enough reason to turn the TV on. Why? B/c there's going to be some major trading going on that I need to be a part of. I realize that may seem too opportunistic, but let's be honest here - the market does not care how or when it takes/gives you money. It does not care if you just had a bad day or a plane flew into NY city.

 

Just my take for why the boob tube is just not useful during the day in my opinion.

[torero 10]

Yeah, I went through that period of ears hanging on every word of the reporters and anchor people (hint: non-traders) telling us their opinions. I learned that what they say and what the market actually don't correlate. If they do, it's already happened.

[james_gsx 16]

I watch Formula One racing during the day if it's on, or LeMans

 

I wish there was a dedicated channel to that stuff, I don't really like Speed since all they show is Nascar. Sorry for going off topic.