Today I bought a Dow saw and it whipped me
The world and his Clanger could see the (at least) double bottom support at 1104 so it was only fair that the big boys took out the stops below at a slightly unexpected (for me anyway) moment. The fact that we didn't follow thru to the upside at all when so many factors suggested we should have may have been a clue, but I didn't foresee it beyond a general feeling of "If the market doesn't do what you expect it's going t'other way" - When? ... was another matter. This uneasy feeling may help explain my scrappy, grab what u can trading today. Either that or the fortified Aussie Shiraz (yup it exists) unwisely imbibed last night.
Perhaps we now go down to 1095 or bounce on the open tomorrow now that a sufficient number of longs have been removed. As BGold says options expiration on Fri should take us to the point where the max number expire worthless at week end - how about 1135ish?
Anyway I'm supposed to be a trader not an analyst so my opinion is irrelevant.
(An excellent point from BBB that I would do well to imprint on my forehead).
Made some impatient trades today as usual - too early in long on the Dow at 61.8% retracement, for instance - but managed to scrape a profit thanks to a cleaner bag of ES.
Pleasing 5 waves down on Dow and ES marked the bottom for most of the day, though the expected ABC retracement up failed on the C wave with a double top and Tick div. The 25EMA 10min (50EMA on 5 min) also helped contain the bulls.
Have I anything useful to say though? Err, no, but we try!
Concentrating purely on the trades not the money is helping - e.g I am more satisfied with my trades today than the ones I made on Friday, despite banking nearly 10x more on the latter. In rational terms I simply mean my entries and exits were more careful, but the overwhelming distinction as far as I'm concerned is that my heart didn't flutter once today; cold and emotionless, it let the brain trade unfettered. Whereas on Friday my pulse rate practically deserved a whole new VIX dedicated to its absurd gyrations = overstaking = not good. Risk is the key, reward a secondary consequence of controlling it effectively and consistently. In fact the less I look at the P&L the better. Take each trade on its own merit and do not worry about the past. That way perhaps I avoid the common error of excessive fear/greed after a miserable/magnificent run. I am also beginning to feel certain that position sizing makes all the difference as far as consistent profitability is concerned.
Many are apt to criticise systems because they claim the market is under constant flux and nothing can work consistently under all conditions; other wise the big boys would all have a whizzy computer program that would rake in millions for their fine institution
for virtually no effort (apart from a fat wedge thrown at their R&D department, no doubt courtesy of whichever private clients they have fleeced the most heinously). Surely the point is that as systems generally make less money than skilled discretionary trading the institutions simply hire the very best discretionary humans they can, as they have the money and the desirability as employers to do this? This in no way negates the efficacy of a good system, it merely acknowledges that one can do better if skilled enough.
I don't believe the basic traits of human psychology change much over time so I see no reason why a well balanced carefully tested system cannot take advantage of this, especially if it is one which uses, at the longest, hourly bars (that way 5 years' testing amounts to a lot of data and a lot of so-called changing daily conditions). The main problem, I think, is the system user, who likes to ignore signals, alter signals, improve on signals etc. at a whim, thus destroyingany positve expectancy the system may have enjoyed.
But I'm prejudiced as I run an hourly system!
Ramble over...over to u BBB! :cheesy: PS Thanks to u and T333 for the M Douglas tip - it's on my Amazon wish list now..
