Days like today- arrghhhhh!!!

Discussion in 'Trading' started by janko, Jul 5, 2002.

  1. janko


    I guess sometimes its best to just sit on your hands on days like this. Big gap and continuing, and just when you think its slowing down and a retracement would be in order - what do they do, they push it higher, ok ok, the second run up, much smaller - this has to be it, hmmmm nope, not yet, ok how much higher can it go, its running out of steam - hmmm yeah guess again. Its very tough to suddenly switch to a different mode than fading the ralies, afterall its what you've been taught that it works for the past couple of months, and today, wham dead smack between my eyes, the damn thing just keeps on running.
    Any suggestions on how to handle days like this, do you just stay out and take the day off???
    Well at least i covered quickly when it didnt give way. That saved my ass from trying to make the market make my short right!:mad:
  2. Hi janko...what are you trading ?

    Also, I'm not sure what you mean by your you want to know what trade setups are best suited for days like this...or where you asking if you should be trading at all on days like this?

    The latter question would be difficult to answer because it would be in hindsight.

    In all...still very nice to see the market perform so strong. Often sets up some very nice trading the following trading days...Long or Short.

  3. janko


    Well i guess my question was is it best to just sit out on days like this or go in the way of the trend rather than tryiong to play pullbacks- however small they may be. I guess after the matter in this case it would have been best to just go long, but i guess my problem was that i was waiting for that retracement that never came, and i've seen days like this, i think it was the csco news when mkt just kept on going and going. I was playing the NQ mini. I was watching the price action when it kept on running and started runningout of volume and would try to short but it barely pulled back and kept going again. I guess after several failed attempts i should have just changed strategy, but my problem was is i was positive that they would sell it off a bit going into the weekend. I guess my assumptions were wrong.
  4. tntneo

    tntneo Moderator

    janko, that's precisely the problem when trading with a bias. you wanted the market to do something, and it did not work out.

    it was a tough play today. countertrend moves are always tough to play and vicious.
    Back to your question : the 30mn rule on gaps applied very well here.
    Of course the high probability was shorting the gap up BUT (and that's a big but - don't you like big buts.. just kidding) when it fails (strength still with the bulls late in the first hour) then you should at least quit your assumption.
    And at best join the train up.

    This is clearly a reaction to the down trend and it could go up quite some, if correcting a big part of the multimonth swing we just experienced.
    For my style it was just best to leave it there and take the last part of profits on the shorts (for now).

    BTW, this is also why we trade multiple timeframes at the same time. So one event in one timeframe does not destabilize the entire operations and multiple systems. Next week will be very interesting giving a boost to some sectors very depressed recently.

  5. watching a gently trending market in one direction, whether up or down, has the dubious nature of being difficult to believe, and once you believe it, then expecting that the trend will continue long enough for you to breakeven, let alone profit.

    perspective, is key. if you're daytrading and will/have to be out by day's end, then that statement is true. if you're swing trading, then you can always relegate your failures to long term trades, and just hold them, until they prove you right.

    today, was a day to trade, only if you were in a surplus, and could afford to be wrong. Then, when the gains came, you'd be pleasantly surprised in the positive.
  6. There is only one answer my friend. Trade setups, not hunches. If only I could follow my own advice.
  7. Mike777


    LOL. I have the same problem. I know what to do so why don't I just do it?
    :( :D
  8. janko


    Yup that seems to be a problem. I'll analyze the chart and for example i'll look at it and say, ok 1050 seems like a short term resistance, ok thats where i'll go short. well it gets there and i look at it and start thinking ok, well wow, it got here, it might go higher, so i wait, next thing you know it starts pulling back, and damn it 1050 would have been a nice short entry. I can't even count how many times that has happened!:eek:
  9. tntneo remarks are right on regarding trading big up/down days.
    Let me add flexibiliity to the equation. Most good traders were probably initially set up wrong, or at best marginally uncomfortable with the early action, since it was counter to the way trading methods were employed in order to generate profits of late. However, both experience and not letting their egos get in the way, allowed them to react quickly to size up the situation and go with the flow.

    Also, from my perspective, it is difficult to outperform the mkt in days like these so I just stick to my discipline and not get down on myself by hitting only doubles instead of homers; you will eventually get in the zone and start outperforming again. We are only human subject to all its foibles, and only a perfectionist would worry over a single day's performance.

    Heck, sitting in front of the computer and making money utilizing your brain is such a treat, how can you be upset.

    God bless the boys who make the noise in front of their trading screens!!!
  10. T/A_Bo


    >I wait, next thing you know it starts pulling back, and damn it 1050 would have been a nice short entry. I can't even count how many times that has happened!

    So don’t let it ever happen again!

    It sounds like you are taking the time to figure out a trade plan, which puts you head and shoulders above 80% of the traders out there. You are most objective and intuitive when your analyzing a market for possible S&R levels. Decide which level you want to target, and what the market would have to do as it tests to trigger your trade. Then once your thinking and planning phase is finished, stop thinking and put the trade on! The market will ALWAYS ask “are you sure?” JUST before the trade should be entered. It’s always trying to give you excuses to not take your profitable trades, and to keep you in your losers. Such is the mental game one plays with oneself.
    I work with people all the time who are fine traders, but who lose because of self-sabotaging behaviors. If you can get to the root of the error, the losses can often be turned off like a light switch, and an immediate improvement in return is experienced. Figure out what your market opinion is, what the market has to do to prove you wrong, then get in there and put on the position!

    Good luck and good trading.
    -Bo Yoder
    #10     Jul 5, 2002