Well I thought I'd be away longer than this , but today was such an awesome trading day, I have to comment.
Trading days like today come few and far between although there have been 2 or 3 already this fall. These are the type of days that are an open invitation to let as much cash fly into your account as you can handle.
The action never stopped so it was important to keep focused and put your brain into machine mode. Sorry I don't have any realtime charts to post as the action was too fast.
I played the inverse ETF's, EEV SKF SRS all day and was rewarded at first with some $5, $ 10, $14 runs long. Caught the top of the turn and rode them down, took profit, went long, took profit went short, long short until the last hour as per my usual style. Then the selling was ferocious and unrelenting until the close. I banked almost $22 runs in EEV, $26 in SKF, $29 in SRS shorts. I was in with everything I had.
Some people were reeling from the staggering moves of the market and I feel sorry for the traders who coudn't come to grips with what the market was doing. But this is your reason for being here, learning all this stuff, suffering through the flat market tedium. Times like these need to taken full advantage of. A lot of money was left behind by those traders who were onl;y staring at their screens.
I have a very strong belief that the market has the capacity to do ANYTHING. And it is best to condition your mind to accept this as a trading truth. Trying to predict levels, bounces, bottoms and tops is an exercise in futility. It can have no positive outcome for you, only distraction. It is out of your control. When you realize that ANYTHING can happen, then you open your mind up to all possibilities instead of rigid expectations based on folly. I was looking at the SRS daily chart instead from 10/28/08 and it had a $70 trading range. The way things were going I thought that could be a possibility for today as well. Turned out to be $50.
Am I brilliant just because I caught the tops and bottom of the moves? NO. But seeing, recognizing and acting on momentum change is what I am good at and focussing only on what the charts were doing paid big dividends today.
Keeping your head on during big moves, trading your normal plan and not letting the big dollar signs cloud judgement was the key today.
If you were one the focussed traders who made 2, 5 or 10 times what you normally do, it doesn't mean you are super , mega , brilliant though. It was only the market conditions giving you that. Contain your ego, trade humble tomorrow.
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Great advice and a good mantra for the day, "Be open. Be nimble." This mindset really helped me this week. Thanks for your mentoring Scott.
Trading the market is an art not a science so I believe it is best to be very liberal in your approach to it. However be rigid with your trading plan, always follow it, never deviate if it works for you.
Good stuff as usual Scott. I think I'm burned out, plain and simple. I was a screen watcher most of this week, which is ok, because I learned from it. I will trade my plan next week. Hopefully we get some good volume moves like we had the last two days and I can end the year on a good note. If not, I will be happy with the success and steps I've made this year. I am switching brokers in Dec. when I get back. I will use the last few days of the year as a learning curve to adjust to my new trading platform and take it slow.
See you next week. Thanks for taking the time to care.
http://www.etfmarketpro.com/direxion_launches_300_percent_funds.html about more etf's nice posts on ur blog how to skiing rolling climbing sliding, trending, on stocks " SIMPLE" ..keep on is to see trend is changing is it like feeling smeling like the speed , or some else because on moving stuff and a 5 min. candle u can be late enter or exit..or is it based on some other simple ........ real thanks for helping others thanks
tradingez, As the momentum changes it leaves telltale clues in the candle movements. Some are subtle, some are not but after you spend enough time you can see the shift change in real time and act on that information. Realize that profit taking always occurs and ride these momentum waves. The reason I use 5 minute candles is to slow down these movements and make time my ally instead of my enemy. It's very rare that I catch the absolute top or bottom on the momentum change and I don't need to to that. I trade stocks or ETF's that have a lot of daily movement so that a profitable trade still results even when I enter late and exit early.
scott, i think you work with quite tight stops as seen in your charts. You said, rarely you catch the absolute top or bottom but it looks like you hit perfectly the s/r levels with a good order size. Don´t you have several misstrades before you hook up the wave right?
Thank you for your insights, absolutely impressive your blog.
max, yes i sometimes have a quick chop chop action and i do post it when i can. But some the things about catching near the start of a movement is that:
1. you get better fills than if you wait for the trend to develop stronger
2. you don't have to wait long to be proven wrong and take a smaller loss
3. i trade stocks that have excessive liquidity. for example SKF traded 21,000,000 shares today
Taking SKF as an example, today I was long going into the close. In the last minute the spread was .01 - .10 most of the time and sometimes flashed a negative number. pretty good for a $180 stock
I'm curious how much time, if any, you spend on Level II info and the bid/ask spread?
GTM - I don't spend much time looking at the L2 or look at it to determine trend change if that's what you mean. Only when the buy or sell moment comes around.
Taking SKF as an example, today I was long going into the close. In the last minute the spread was .01 - .10 most of the time and sometimes flashed a negative number. pretty good for a $180 stock
what do u mean by that?
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