The Emini wizard system suggested selling the 1103 this morning, despite the new yearly high.
Was this logic or intuition?
Probably a little of both.
We have objective criteria, that helps us to see potential market structure and turning points. This approach is not infallible, but is usually reliable enough to get us in the right neighborhood.
Reacting to the setups is a choice.
During the course of the trading day, multiple trade opportunities occur. Some are better than others. The quality is usually determined by the risk reward, the timing, the context of the bigger picture.
Veteran traders know themselves as well as the market. Experience helps to “season” our instincts and emotions. Almost.
Breakout traders are aggressive, and are willing to chase price. They buy higher highs, and sell lower lows. When their trade doesn’t work out, they accept the stop loss.
We prefer to “guess” where the rhythm suggests price will revert to the mean. Scaling in and out allows for greater flexibility, and less precision. It works by creating “zones” of support and resistance.
Sounds easy in theory; the trick is to not be stubborn if the level fails.
The battlefield is littered with the bodies of traders who lost respect for the market.
This post is dedicated to all those vets who gave their all so that we may enjoy our freedom.