Today is Thursday, April 2nd and the overall market ran into some resistance today.
I have not talked much about daily market direction lately, because I had not seen anything that was worth pointing out. I wish I had posted what I saw yesterday, but today is still OK. I will give you a 5 minute overview on what I see and how it could be played out over the days to come. But before I do that I want to give a quick recap of today’s trading.
It turned out good. That is always music to my ears, but as I mentioned before, if you are not in focus and have distractions going on, your performance is going to suffer. That is how I started out. I was giving a trading lesson to one of my students and I had not yet gotten my points. My mind was not on the current price action and when I got around to taking a few trades, they were good for gain, loss, gain, loss.
I did that three times, back and forth, until I settled down. Part of the problem is trying to trade in the slow patch of the day. I needed to take my own advice from yesterday’s trading tip.
I thought about that today as I found myself in the red. On my way into negative equity territory, I had to pause, take a deep breath and relax. The market has a natural flow to it and you need to find that rhythm or flow. I cleared everything out of my mind and just waited for the trade to come to me. I did not have to go after it. After that point, I had 10 gains, one loss and one even, to go from -600 to + $2,000, much better.
My daily loss limit is two times my minimum daily goal, (between 2 & 3 point) and I have yet to stop trading because of my loss limit. It has not happened yet with my daily gains now stretching into the start of my third month in a row. The actual trading totals have been on average about 3 times my daily goal. For a long time, I was struck on trading 5 contracts and I must have been averaging 3 times that on a daily basis. I have currently wanted to trade less and increase size, so I have been doing an OK job with that.
You need to be emotionally ready, as well as financially, to increase your size. But, if you are able to see the trades each day and know why and where it is you are taking those trades, then it is just a matter of doing what you know. Leave the fear behind. In a market with volume, you will not be in the trade for very long and this will cut your anxiety or fear down to manageable levels.
Again, for the trader who is just getting started, you need to be able to put those winning days together, one after another. That is why, I feel, you should not be in the market all day. It is too much for most to handle. The market has a way of wearing you down, until you get sloppy or let your guard down. Then you may find yourself in the fight of your life. Don’t put yourself into that position. Get your points and get out.
I have seen just about everything the market can throw at me, but I need to respect it, or I too will be humbled. There are times when you should not trade at all. Erratic movement without periods of consolidation and choppy direction-less formations are all telling you to take a break.
It is amazing what that decision can do for you. When you come back after an hour or so, it can look like a whole new market, with predictable swings and volume. That is the environment you want to be in.
Tomorrow I will record a few of my live trades with commentary as I was doing before, for those who are looking for that.
As I promised, below is a short overview of how I see things in the daily’s. I hope it helps, but remember, you need to think for yourself and see it for yourself to be able to trade it for yourself.
http://www.screencast.com/t/qCTlcKhG Today’s equity chart
http://www.screencast.com/t/bljwZXzuz9e Market overview on the Daily – video 5 minutes
Related posts:
- Dow Hit Resistance at 8240 + Level
- Market continues sell off & Nice smooth day of gains
- Trading Discipline, Part 4
- Technical Analysis for Today’s S&P 500 E-Mini
- Interesting Trading Lesson Today
Tags: contracts, daily goal, daily loss limit, Dow, equity, Fear and Greed, focus, market direction, Price Action, resistance, Trading Lesson
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