Thursday, November 13, 2008

Keep your head on tight

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.