Today is Tuesday, January 19th and the market moved right on time, S&P up 14 points and Dow up 114.
We were on that critical support and other traders knew that too, that is why I feel they stepped up to the plate and bid the market up. When you have trend days, where direction is mostly one way, price action is and looks different.
You won’t have that back and forth price moves that are usually present, but shallow pull backs with continuation moves in the direction of the trend.
If you came late to the party, after the first hour, there were really only 3 moves of any significance for the rest of the day and they were all up, but not anything large, maybe a couple of points each. There was a dead spot today from 10:00 am to 12:30 pm West Coast, that probably killed a lot of traders. There was no movement, even after the New York lunch, there was absolutely nothing. I had not seen it that slow during that time, as far as price range is concerned, in a long time.
I quite trading around 12:00 and hour before the close and did not hit my trading goal for the day. It is really alright, I was not worried about that part, I can make it up later this week, but I was getting a little frustrated. My entries were not very good today and ended the day flat with 4 small gains, 4 small loses, and 3 break even. The commission cost for the transactions put me under just a little. I did had my chances but it was one of those days. I did see the market move out for one more push at the end of the day, but I had stopped.
I did not want any more of my emotions to work negatively against me, so I just stopped. I was really OK with that. This is a little lesson for me. Can I stop trading if I don’t like the price action. The answer is ”Yes”. When the conditions are more favorable for me, I can step it up. So, for the things just mentioned I still felt good over all. Staying in control is so much apart of being successful, it can be the breaking point for many traders. Frustration sets in and then you begin to make reckless trades, “don’t do that”.
OK, back to where I left off yesterday; I was laying out fears that traders often experience and commenting.
Fear; Afraid of being wrong. This is a common one and I will expose it. When you trade, non of us know if the trade is going to work out or not. At that point we are all on a level playing ground. The difference is, one trader knows what he is looking for and when he see’s it, feels comfortable enough to put the trade on. He has a high degree of confidence, only because he has seen it work out before when the conditions were the same. On the other hand, the trader that does not have screen time and does not know what he is looking for, is like a guy poking around in the dark looking for the light switch. If you are that guy, then it is normal and understandable that you will experience fear and or be afraid as you put a trade on. You may not have the screen time you really need to go forward, but you decide to push the envelope and start trading anyway. The result is, you place trades out of fear and uncertainty. Your results are going to suffer and eventually, the market will drain your funds. Traders tend to increase their mistakes and exhibit poor judgment when faced with this emotion running through them. Dont’ let that be you. Get educated, trade your plan and stick with in. Stay in control. If you feel you are starting to lose it, STOP. There is always tomorrow.
Fear; Fear of failure before friends. This is something I learned a long time ago. If you are telling your friends and people you know about your trading venture, it is a big mistake. Let me say that again. I feel if you talk much about your trading to others, it is only going to hurt you form getting to the very place you want to go. There are many reasons for this. One is, we tend to build ourselves up greater than we should and when we don’t live up to what we have spoken, we feel like a failure and this increases pressure. If you are under increased pressure, your trading is going to suffer. When your friends ask you how is it going, you will feel compelled to either tell the truth or lie. If you tell the truth, you make yourself out to look foolish, since all they heard about for months was how you were going to make it big. If you tell a lie and make yourself look better than it actually is, that will only add to many more problems down the road and stretching the truth like this, is not good for anyone. So, either way, you loose. Don’t put yourself under more pressure than you have to. If people know what you are doing, you can tell them, but keep it real simple, don’t get into details and play it all down. You will be better off in the long run to meet your real goal, steady profitability.
Fear; Afraid of never making it as a day trader. If you are not ready to compete in the ring, don’t enter yet. If you are afraid of not making it, it may just be a nice early warning signal for you to do more study on price action. How and why prices move up and down, support and resistance, pivot points, price patterns, etc. To often, traders look for the “Holy Grail”, whether it is an indicator or automated system or what have ya. Traders should learn the things above and know them like the back of their hand. The market is not going to hand everyone victory. We need to stay humble in our trading and keep learning. It is not easy, but for those dedicated and have the right direction it is possible.
I offer such direction for those seeking. Email me, with your questions and get the trading edge.
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Tags: pivot points, Price Action, price patterns, screen time, Support and Resistance
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