Hi all,
A simple trade this morning, highlighting that trading can be reasonably straightforward if you are clear on your method and apply it diligently to what you see in the market:
Market opens at 8am around the 13,800 big figure, falls back to 734 then runs up to test 800 again before rolling over into a downtrend. The market breaks down through the early 734 low and pauses in a small consolidation area in the 05-33 range, highlighted in the orange box on the chart. Rather like yesterday (see post #478) I wait for a second test of the 33 box high to occur and fail, triggering me into a short at 27. The stop at 47 is above the box high, the +1R 07 target is just above the box low, the current trend is down. So, a solid setup and this time it works nicely and the 1R profit is quickly captured at 07. My natural caution prevents me from waiting to see if we get a test of 700 - we did and the market actually fell all the way to 580, so just a little left on the table today! Oh well, you can't be both cautious and bold, your trading style is going to tend to be one or the other. Whichever you choose, be aware of the consequences of doing so - both good and bad - and accept them gracefully, you can't have it both ways.
I hope you can see that, because I had a clearly defined method coming into today's trading, the trade was simple enough. I wait for a valid setup and take it. I don't know if it will work today or not and I don't care, my job is not to predict individual trade outcomes, it is to follow my method diligently and with good risk control in case it doesn't work out. Trading does not have to be so complicated - my method certainly isn't - but you do have to be clear on what your are doing, and do it properly.
A simple trade this morning, highlighting that trading can be reasonably straightforward if you are clear on your method and apply it diligently to what you see in the market:
Market opens at 8am around the 13,800 big figure, falls back to 734 then runs up to test 800 again before rolling over into a downtrend. The market breaks down through the early 734 low and pauses in a small consolidation area in the 05-33 range, highlighted in the orange box on the chart. Rather like yesterday (see post #478) I wait for a second test of the 33 box high to occur and fail, triggering me into a short at 27. The stop at 47 is above the box high, the +1R 07 target is just above the box low, the current trend is down. So, a solid setup and this time it works nicely and the 1R profit is quickly captured at 07. My natural caution prevents me from waiting to see if we get a test of 700 - we did and the market actually fell all the way to 580, so just a little left on the table today! Oh well, you can't be both cautious and bold, your trading style is going to tend to be one or the other. Whichever you choose, be aware of the consequences of doing so - both good and bad - and accept them gracefully, you can't have it both ways.
I hope you can see that, because I had a clearly defined method coming into today's trading, the trade was simple enough. I wait for a valid setup and take it. I don't know if it will work today or not and I don't care, my job is not to predict individual trade outcomes, it is to follow my method diligently and with good risk control in case it doesn't work out. Trading does not have to be so complicated - my method certainly isn't - but you do have to be clear on what your are doing, and do it properly.
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