What a roller coaster ride today.
If there is one thing I have observed happen over and over in the markets, it can be summarized by these few words:
Anything can happen.
We had a wild one today.
Short review tonight; long day and I attended the informative seminar by @FT71. Behind in my evening wrap up, but I find keeping this “journal” is important to help me better learn this business.
A few key ideas today:
- Rule #1 be very careful today; stay out of trouble is the primary goal
- Don’t let any trades get away from you; accept stop outs
- The 49 area is resistance until broken at the open to test the Angel at 40
- The 36.75 Low is support until broken
- The Daily, Weekly, and Monthly charts all suggest 36 was a support target
- We have 56 as initial resistance above the 49
- It’s possible for this to be a 123 LL
- Since the 49 was resistance and has been broken, we need to think of that now as support
- As long as we are under the blue line shorts are in control; if we flip above it the trapped shorts can fuel this to any day high
- Short side is now risky, scalps only if you play
I felt we did a great job for our team with Rule #1. We continually caution our team about the perils of shorting too low, or buying too high.
Taking profits too soon in momentum trades is an area that I need to improve, but there are worse problems to contend with I guess.
I have learned about the dangers of shorting a ramping market…but I often leave the egregious part of the trade on the table.
If $100 was lying on the ground, and $50 blew away, would I bend down and pick up the $50? Of course.
If I bent down to pick up $50, and another $50 is still there another 10 steps away…would I walk up that hill and pick that up too?
I should, but I don’t make that effort nearly enough.
My conservative nature is more an evolution; the battle scars over the years leaves me more risk averse than I care to be. As I advised our members…most times its just better to be content catching the piece out of the middle. Capture over and over and over, and in both directions when the market is ranging.
Bear/Corrective markets can have vicious rallies. The late day breakout today shows the importance of “joining” the winning team. We can easily recoup stop out losses if we reverse and go with a trend against trapped traders.
Great seminar today by @FT71 on market Profile, I learned a lot. He doesn’t use moving averages, but I find them really helpful to see the rotation from range /bias short to bias long. Note the blue line and the red circle.
Many ways to interpret the market; no doubt he has a good method that works for him.
Dismantling a system that works for me is the furthest thing from my mind.
Keeping my mind open and understanding how others play the game…I’m all ears.