Today is February 1st and what a good way to start the first trading day of the month, +15 on the S&P and +118 on the Dow, but will it last?
Currently, the momentum on the daily charts is down and the 120 minute chart (2 hour) has just turned up today. The weekly chart is flirting with a turn in the momentum, but it has not happened yet. A lower weekly close and I am sure it will turn down. So, a pull back up for now, will bring a moment of pause to the market from this recent sell off. We could see a sizable move, if the market can get up over todays high with any conviction.
I do see some pretty strong over-head resistance just a couple of points higher from todays close. We very well may see a slight rise on the open, followed by a pull back down inside the range one more time, before we make another attempt to break out of the downtrend. We will see what tomorrow brings, it should be good. I think the price action is going to get better, with good swings in both directions.
I did not post anything for Fridays session, I had company over the weekend, but I will post a video managing Fridays last trade + 5 S&P points and show my results for the rest of that day.
In todays trading, I did pretty good. I could have had all winners, but I did not take enough time after a break I took, to better accurately see where we were and likely to go, resulting in a loose of one point. Other than that, I had several trades that I scaled out of the positions for multiple point gains and a few 1 pointers or so. It’s in the video below if you care to take a look.
I was going to stop after my first three trades, which was plenty for my daily goal, enough for even the high side. After taking a break for about an hour, I thought to come back for another session. I don’t always do this and I don’t always recommend traders trade all day or even most of the day, because fatigue can set in and the likelihood for making mistakes goes up.
If I do come back, I almost always cut my size down. That way, if I have losses, it is not going to impact my gains as big a degree. If I have additional gains, it only gets added on for nice day. This is a conservative approach and is recommended if you already have made your daily goal.
We have all heard of “Money Management” and how important it is. It is true. If you increase your size when you are not trading well, you make everything harder, not easier. Traders often try to get back what they lost by doing so, which is one reason of many, that most don’t make it. I hope that is not the case for those who take the time to read my trading blog. I try to give a mix of different idea’s, thoughts and insight into a day traders world.
Most of us pursue this business because we love it. We love it for the opportunities that it can bring as well as many other reasons. Some traders want to make it ($) fast and lots of it. I don’t recommend that either. If you go to fast, you only speed the process up to the point where you will again make mistakes, loosing the hope you had when you first started out. You can’t change past trading mistakes that we all make, but we can try to uncover what it is we just did, why we did it and what are we going to do to change. If we don’t take all three of those seriously, we will only come back another day and repeat the same trading mistakes all over again.
I was watching a movie recently where a patient was seeing a doctor. He told him, it hurts when I do this. The Doctor then said, if it hurts when you do that, then don’t do it. We don’t like it when we take losses that are not apart of our plan, strategy or method, but your first loss is best. Why is it that we to often take trades that don’t fit our model. Lack of patients is one of them. I admit, I don’t have all the patients I could use sometimes while trading. That is why I trade small time frames. I don’t have to wait to long for another trade to come my way. If you are trading 15 minute bars or even 5 price bars, you may have to wait for some time.
The point is, everyone is different and we all need to find our strengths and weaknesses. If you know what your are strong in, work on making it better. The area’s of weakness, take extra time and reflect what is holding you back. To often, it is in our minds. I am serious. There are a lot of good traders out there that are just an inch away from bringing it all together. They just need a little help, guidance and support.
Let me give you two things that can really help those who feel that you are so close to bringing consistent profitability to light. I know of and have heard of traders who have done this and they say, it is the best thing they could have done. I have talked before about how important the mind is and to often, how we see ourselves inside, gets transferred outside. If you don’t have the inside part right we only work against every good thing we try to bring to the trading screen.
There are many ways to go about thinking the right way, not only when we trade but throughout the day. I can see that I am close to my typing limit and I will probably just wait until tomorrow to better give you the right background on this. If traders take this seriously, I truly believe it will help some if not many bring up there, BOTTOM LINE.
