Up and down

The last several trading days have seen some significant directional trading up and down.  I have never seen it like this.  The average rotation on the ES (S & P e-mini) is about three points.  The ES has been trading in one large rotation of about 13 points.  Taking advantage of those days would net huge profits.  The issue is that you just don't see this many significant directional days.  The normal rotations have been replaced by significant up and down turns.

It is just more evidence that the market will do whatever it wants to do, and that nothing is "normal".  You can be trading for years and you will still be learning new things every week, (at least a trader should be).  You can't be prepared for everything, but you should do what you can to prepare for what you know and what you see, not what you expect.  Every day provides a new storyboard with new context for the same prices and time in a day.

I guess that trading days are like snowflakes, no two are alike.  This has a tendency to mess with people's minds and confidence in a big way.  It is one of the reasons that many people are not successful at trading, give it up and leave it to the "experts" who show their expertise using commissions.  I know that it has messed with my mind.  Fortunately, I expect it so my confidence is not rocked, just my account sometimes.

Once again, I have proven that when I do my homework, build my setups and trade within a plan, I do well.  When I go "rouge" and try something different, the market is consistently there to remind me that it has a mind of its own and I will follow it, it will not follow me.

Tomorrow is another snowflake.

Tough lessons

Well,

It has been a while since I posted.  I have been working on finishing up a project and then I did not do much trading during the week of Christmas and New Year.  When I did trade, I had a several good days and two bad days.

It is amazing what the bad days can do to your psychology and attitude...if you let it.  I have been successful in my trading over the last month primarily because I have been doing my homework, which is to look at the market history from a large perspective and understand where price is relative to the whole auction process.

When I do my homework, it means that I spend time at night reviewing the day and then in the morning to see what happened overnight and to finalize my plan for the day.  When I do this, I have been quite successful.

The two bad days that I have had recently are when I tried to trade just by showing up in the morning and look for trade set ups and I have tried to do some trades that were just not mine.  I tried to squeeze a little out of the market and I got slapped.  However, I have learned that if I plan on trading without doing the work, then I will trade only in simulation mode.  It will be the price that I pay for not doing the work necessary to trade with my money.  I also made some stupid decisions to move my stops, expecting to be able to buy or sell into a trade that went against me to beat the market.  Dumb, dumb, dumb.

Some days, the best trade is the one that you do not make.  I will say it over and over: "Homework and discipline are the keys to success in trading".  Those that don't do the work or have the discipline give their money to the ones that do.  'Nuff said!

Another good day of trading...

While it is true that it was pretty slow today, it was still a good day for trading.  The market looks like it will wait until tomorrow afternoon's FOMC announcement to determine if the current value is good, or it needs to find a new value zone.  Until then, I expect the same opportunity in the morning that was presented today.  It should be a good morning for trading and then it will be time to pull up a chair, grab some popcorn and watch the melee ensue at 1:15 when the Fed makes their FOMC (interest rate) announcement.

We also have some big news about an hour before the cash market opens that could present some decent opportunity.  Consumer Price Index and Housing Starts figures come out publicly at 7:30 a.m.  Those can be like roller coaster rides and are not for the faint at heart.  There is no planning for those trades. It is all reflex and reaction.  A run can be over in seconds and back down in seconds again.  I trade very small or in "sim" in those cases.  There's no need to gamble when trading.

Monday, Monday, Just love that day!!!

I read a lot of complaints today about the market movement today.  Some said that it was too slow, while others said it was too flat.  It is true that price wasn't flying around today, but I had another great day and even surpassed my target this morning.  I took two trades.  The first took about 30 seconds.  The second trade took about an hour and a half!  That is a long time in a trade.  It started out against me, but because I did my homework and waited for the price to get to where I wanted, it did not go far against me.  Then it turned around and moved right on up to (and actually through) my target.  After that, there was one more trade, but I had a meeting that I had to get to and I decided to take my money and wait until tomorrow.

Unfortunately, I have a few meetings in the morning and might have to miss trading tomorrow.  That's always when the best days happen.

As the market turns...

Friday was another great day for trading and another target day made.  The market is never predictable, but sometimes it acts "normally" and trades within a range, turning up and down.  The challenge of course is knowing when to go up and when to go down.  That has been the fun part.  Doing the work, studying the market, making a daily plan, and then executing the plan and staying with it until you hit your profit target, or the market tells you to get out.

I was able to hit my target with two trades on Friday, which is unfortunate for my broker, but good for me.  Don't worry about my broker though as they will have their day with me.  Besides, there are a lot of other people paying them plenty of money, making a bunch of trades every day.

I am looking forward to Monday...

A Great Trading Day

Wow!  Fun, fun, fun!!

I woke up early to go over the market (my homework) and found the places where I wanted to put trades on.  I set my trades to execute if/when price got to a certain level and then I went to breakfast with some friends.  When I got home from breakfast, I found that my orders were hit and my profit targets were automatically filled while I was gone.  I was then able to get into a trade just before market open for another great trade on the Russell e-mini index.

It pays to do the work, because then....there is no work.  Get it?

Homework

I remember that when I was a kid, I was never a homework fanatic.  There was always something else to do that was certainly more fun and memorable.  I can honestly say that now that I am a little bit older, I view my homework in quite a different way, especially with trading.

Homework is necessary every night and especially every day before the trading begins. When it comes to investing, who do you rely on to do your homework?  I remember that I would spend 15 minutes every year reviewing the single page summary sheet of the various Fund returns, in order to make a selection for how I would divide up my 401K account.  That was it!  Unbelievable.

Now I do my homework every night, so that I can review the trade day in the morning, set my targets and plan at the beginning of the day and then watch, modify (if necessary) and execute the plan.  It can be a fair amount of work, but it makes the execution of a trade significantly easier and a lot less stressful because if I get into a trade, I have done the work to know why I got into the trade and have waited for that specific scenario to get into a trade.  I am no longer reacting to stale pricing data, but rather acting from my plan and a position of expectation.

Trading is not hard, but it is work.  The only magic to trading is to make your current perceptions and paradigms disapear so that you can actually learn.

Doing my homework and creating a plan to trade with gave me my single largest profit day this week and two other profitable days to make three for three this week.  I am having a blast doing it.  In fact, for those who know me, they would be shocked to know that I would rather do my homework, and plan for trading and actually trade than I would rather go golfing!

P.S.  I gave my golf cart away.