Today is Tuesday, December 8th and we finally see a crack in the armor.
It is really still a little early in the game to call for a sell off from here, but the momentum in all the short-term index’s are now still currently down. Will it continue, we will have to see? There is some support around the 1080 S&P number that I can see. It may be that we hit it and bounce. If that happens, we will have to see what happens after the bounce, that is going to tell us a lot more. I will be looking for the sentiment number that came out today, but won’t be able to see until Thursday. I will report.
In today’s trading, I did not have too much time to trade today which was fine for me. I find that I am not yet trading on the open, but I will be some time soon, I can only hope. The price action is very fast paced during the first hour and I really like it. It actually fits my style and I take it like a duck to water. The thing is, I find that I rarely trade it. I know, what is it going to take. I am working on it. I am going to have to break out some of that discipline that I talk about here pretty soon.
To capture two points during the market open, can happen so fast, I used to find myself finished almost what seems like before I really started. There is much more opportunity during this time, but you have to know how to sift through all the noise. Well, I can trade noise and I teach how to do it and for how much to do it for.
Often, the first move or so is not the real trend. The market is looking for anyone it can hook, before it takes you down. Market psychology play a big role in the trading markets and you need to know how to maneuver in the turbulent waters. You can get whip sawed extremely fast if you are not able to flow with the market rhythm.
The markets have a rhythm or some have called it a vibration. I can relate, because that is what you need to feel to get in sync with the order flow. Don’t get stuck on one direction or, if you truly see a down day and only want to take trades in that direction, work on excellent timing. That is going to be the two or three days per month that the market basically only trades in one direction. Often there is some catalyst to push the market in one direction during these days and it often pays not to go against it.
Barring that, you will usually see trades on both sides of the fence. Some people can only trade from the long side, it is easier for them and seems more natural. I would say, that as a futures trader, I have a little bit of a problem with that. If that is what you do better, OK, but I believe you should be working on seeing the same trades as you take on the long side, in the opposite direction. I will give you, it does take time to spot the reverse side of a long and have it look as good of a formation as you are used to taking.
We all need to continue to work on timing, price action formation, order flow, what constitutes a trend and what is considered counter trend? Are you skilled to spot counter trend trades, or do you have to sit out for long periods of time for everything to line up?
Just today, I heard an interview of a trader who takes a 6 point stop when she enters a trade and she has a 12 point target. I am not criticizing her for doing so, that probably fits her situation and that is why she does it, I would guess. But to have a target that large, you will have to sit and watch the market all day long for things to come together. If you take a 6 point stop, you may have to wait two days for a trade to come your way and you don’t even know if it will hit your targe. The ranges are not that large everyday and if you miss one, you may have to chace it which only adds to your risk.
If it works for her that is great, but you need to find a style that is going to not only fit your personality, but fit your time horizon. If it takes 6.5 hours a day to watch the markets x 5 days per week = 32.5 hours per week and divide that into your net return for the week/month you will see that if you value time, as I do, you end up investing a lot more.
I value time pretty highly and what I can do with more available time. I look at the big picture as a form of leverage, I know we can all relate to that. Limited Time x Resources = More available time x Expanded resources = Investments in lasting relationships and people. Money is not the ultimate goal for me, it is a means to an end. I know we have all heard that, but it’s what makes up me.
Have you ever asked yourself the question, “What is it about Day-Trading that appeal to us”? That is a good question and if you answer it honestly, it could actually help you in your trading. If you really know why you like the business and many people say, “for the money”, and that is OK, it is an individual thing, but maybe try and go a little deeper.
If it is for the money, than you should not have a problem to close up your computer for the day after you have hit your goal for the day. See what I mean? We all trade for different reasons and it is good to really break that down as far as you can to better understand the decision you make while trading. Food For Thought.
Until next time…..
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