I thought I would provide a follow up to this post for anyone who might have (or will) experience the same difficulties as I have... and to anyone else interested. It is true that my intraday methodologies involved a rather "90's" specific paradigm, I see that more clearly now. That market (stocks) contained a tremendous amount of exuberance that was driven by a lot more "dumb money" than today's markets I would say. There was a lot of opportunity in simply becoming the expert in the best stock(s) in play for the day. I, and many others in trading rooms like Broadway Trading, Hearland, & Schonfeld Securities were quite successful at this for some time. In looking at the market in which I began trading again (November 07), its no wonder that I found success once again from a daily plethora of panic stricken issues. Fear overtook the markets and accelerated into the end of Jan, where the markets began to bracket. At that point, simply following intraday price action proved insufficient. Since my initial post, and as a result of the responses here and dialogue elsewhere, I have read several of James Dalton's books on market profile, several of Alexander Elder's books, and have become much more studious of the relative strength and various S/R levels of the stocks I am trading and the broader market in general. I also took the advice of Don Bright and have begun to focus on a small group of specific stocks rather than a new stock(s) everyday. For one, this certainly has made the process of studying new methodologies less daunting. A fairly good background in the markets has allowed me to to obtain a new context rather quickly, and I am enjoying the bigger picture and greater conviction it has created. I stopped trading for 2 weeks just before I first posted here to dive into the reading, learning, and preparing. Since then, I have completed 4 weeks of trading activity. I felt rather constipated the first few days trying to watch the market and sort through my new game plans while patiently waiting until my instincts resurfaced after digesting the new paradigm. I began trading again with a few stocks that simply had good overall price action. I study the internals and compare the ongoing price action of these stocks against the broader market as well as the respective sectors. I've since begun following sectors in play (such as the homebuilders and banks) and have played the issues based upon internals as well as the relative strength to other active issues, and the broader market. I am happy to say that I have had 4 straight profitable weeks. I have scaled my size back up to 1/2 of what it was before I began experiencing difficulties, and will continue to size up with continued success. Its a good sign. Most importantly though, I am empowered by the flexibility I have gained and the expanded perspective that has resulted from diving into new concepts that are already proving successful. Emptying our cups of the old and faithfully following a new path is an especially difficult feat in the world of trading, which compels our habits and rituals with so much memory of fear and greed. It used to suprise me more how others, as ambitious as they appeared, simply refused to try anything new I thank all of you for your input and guidance.
Of the (3) requirements of profitable, long-term trading. The 1st and most important is correct market analysis. As without that, you cannot get to the 2nd requirement, which is matching a correct strategy thereto. The last requirement is the discipline to follow the strategy until market analysis indicates a change in market conditions. Then, of course, just repeat the process.
I am a long time pure day trader, and this is the easiest market environment I have ever seen. The ranges are massive. I am also a pure directional trader, and I don't trade equities, so that may have something to do with it. But big, smooth moves, even though they are fast, make this period in time one to remember. In case any one is wondering, I am a futures trader trading ES, ER2, ZG, ZB, EC, and QM. That's it. At least one of these is always moving like a freight train. For those non futures traders out there, it is stock indexes, gold, bonds, euro/USD, and crude.
jayford big smooth moves? what have you been smoking? you call up 10 es pts and down 8 the next second smooth? anyone with strict small stops has been churned to death in this market. yes there's massive swings but to capture it one must be able to take some pain on lot of whipsaw. personally i've made a fortune on financials but i had to do some scaling in and i was down a few times.