Today’s action had several key components that made it challenging for many traders.
Risk /Reward and Timing were two key players, and we had a few trades we liked, a few we didn’t.
The long side trade out of the gate was not a high odds trade, and we suggested conservatives wait for a better opportunity.
“Find the dream we can speak to…”
Pre market traders who were up early saw the Breakout, and a marginal high was made.
Aggressive longs won the first round at the RTH open, creating the opportunity for the roller coaster wrecking ball trade.
We love that pattern, and can only tell in hindsight if we are right about it.
Longs delirious with delight who fell in love with their position got hurt, especially if they tried adding as the market retraced.
That’s the Primary trade for RTH, and all we need is one good trade a day like that.
Partial targets are hit along the way, like the 8.75 magnet.
Lucky to get that far, and more is gravy.
Knife catchers were able to capitalize on the lunch timing.
The Bear Flag part, the bounce IF the low is in, can just keep edging higher, knocking out late entry middle zone shorts.
That Shake ‘N Bake move catches late shorts as well as uncommitted weeklies.
The double bottom at five bounces just a bit more than many shorts are happy about.
We had a poll:
What is the stop for short side for re-entry?
Conservative traders usually play a bit less, but also usually can find better risk/reward trades.
Anticipating the bounce to the 11/12 zone was normal; allowing for a deeper pb and waiting for the EOD trade allowed conservative shorts to re enter in the 12.5+ zone. We felt position shorts would remain in; day trade shorts: “Two points behind your entry.”
Each of us has to determine our own comfort level based on how we played the hand we were dealt today.
With profits already safely tucked away, we suggest being choosy about giving away hard earned profits.
Seven point range on Friday; at least today the range was a bit more workable.
I felt the Low and High for the day were already in after the 5 was hit, not expecting a runaway day in either direction ahead of FOMC.
RT @Jediphone: 3 Peaks and a Domed house market idea by @CarlFutia -> Interesting… $ES_F #EMWS $$ / thanks Jedi
Brasil61 : amen ..say it again..!->RT @eminiwizard: timing and risk reward everything in this business #EMWS
Renato : RT @eminiwizard: timing and risk reward everything in this business #EMWS
“If we hit the ball into the woods while playing golf, we can try for a miracle shot, or we can pitch it out back into play. Then we can continue on without really damaging our scorecard. That’s course management, and the same is true for accepting small stop outs rather than averaging in multiple times and really getting beat by an outlier type day.”
Those two consistently good traders already know that axiom; by re-stating it they are embedding it more deeply into their sub-conscious, because they know how important that idea is.
We have no control over the market. All we can do is try to exert some control over ourselves.
I don’t think this great singer was a relative of Jesse the bank robber, who most certainly studied the criminal handbook…