Today is Friday May 14th and what a sell off from the top as called.

We moved up to the 1177 area (1175) as called in the night trading two days ago and sold off yesterday with follow through to the downside today.  At 12:19 Friday West Coast time as I write this we are currently at 1127 with 1124 the low for the day That would make a 50 S&P point drop in two days since the call as of now.

As I mentioned I knew there was traders who hold positions overnight just waiting to catch the S&P short at the top. They even did not have to wait up, depending on the time zone as a strategy for those who make such moves is to sell short at a price, say 1174 and put a price in to cover, say 1178. What happens here is if any time during the night the price trades to 1174 or better, they get filled and then there buy stop gets activated at 1178. This is a little risky because you should always watch your positions before entry, but I know it is done all the time for those who can take on the risk.

If that was to much risk, there were low risk area’s to get short in yesterday’s market, especially late in the session at 11:25 (West Coast) as the market dropped nicely. I don’t play the long term swings but I like to follow it, to better stay in touch with the general flow or rhythm of the market. This way, when I come into the market, when ever that is, the open or more likely mid day, I am not having to do as much analysis to get up to speed on the big picture.

In today trading I have a u-tube video of the trade working. I only took three trades today and picked up my minimum daily goal. I don’t always try and make the huge days every day. I find it easier to just trade to a modest target and stop, but that is not every day. Some times when the market is moving nicely, I will take advantage of the movement and go for much more. Traders, I feel need to keep a handle on always wanting more. If you struggle with this, to often you will not only lose what you had and more, as you find yourself saying, “should of, would of, could of”.

If you don’t what to find yourself in that situation, then you need to pick a modest daily goal and stick with that. On days when you see the trades easily and the market is just giving you the move, take those and add to your day for extra returns. I feel we need days like that a few times per month (3-4 minimum ) to help out with any bad or struggling days you may have previously had.

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Strength to take your losses: Every trader is going to have losing days, that is just the way it is, but you can keep it to a minimum by having a daily stop out point for yourself. Sticking to a daily stop point is just as important as not pulling your stops and accepting that you were wrong on that trade. We can not let our ego’s get in the way of attaining our trading goals. Those that do, will struggle more than they need to.

You need to come to the conclusion that you will not get all your trades right and you need to stick to your pre-defined stops. When you pull your stops, you are telling yourself that you are not ready to trade. You can not handle a losing position properly. That is only going to make it worst the next time you put on a trade as well. If you substantially moved your stop or pulled your stop and the market were to recover, you may think that you did the right thing, but you will loose what ever you recovered on this trade and then some on future trades, because you just programed yourself, for when you get in trouble, move your stop or cancel it and give the position more room to come back.That is going to set you up for only bigger losses in the future at a time when you least expect it.

With this kind of trading behavior, you are unstable. You will never come to find the consistent market gains that you so want. The harder you try to cover your losses the more you end up calling them to you.

What is a trader to do? The first thing is to accept that you will have losses and resolve that you will not pull your stops or move them except in the direction of your trade position (locking in profit). This is a mental decision that needs to be resolved before you put on another trade. Next, in order to attain the goals that you set, you will never achieve them by widening your stop, so don’t do it, ever. If you are not sure of the trade and feel uneasy about it, hit the close button and you will go flat and all stops will be canceled. It is better to do that than see your trade go against you when you know something is wrong and try and make up for a bad decision by doing what will never help.

If you are always getting stopped out, that is a sign that your timing is off. Trading is about timing, pure and simple. When to enter and when to exit. If you are getting stopped out, you need to look at your trading model. What ever you do, you need to be consistent in it, that way, once you find where your entries need to be, you will be able to repeat, again and again.

Below I have a screen shot of my T-2 trending model with only one indicator at the bottom. I have many more things to build on the charts to make it complete but only showing this part. This day up until 12 pm West Coast had 18 trades (23 whole day) of at least one S&P point profit in it and carrying only a 1 point stop. I see virtually all winning trades for the day. This is just to give you an idea that timing is the key and it is possible to find if you understand how to trade price action with some help from the indicators to start. As a note, I would not be trading all of these turns and teach how to screen out the best trades in my mentoring program, again, just showing what could be possible.

Have a great weekend to all !   If you need or want help, email me at vinnie@sniperdaytrading.com