What I've discovered about intraday trading (at least for me) is that execution = 80%, prognostication = 20%. Many days I will come in thinking the market will trend one way or the other, and I might even be correct in retrospect; yet because of a few early mistimed entries, I will find myself constantly chasing when the market goes the way I "predicted" (fear of missing the move I called) and then getting shaken out too easily on the slightest pullback. Conversely, some of my most profitable trades started out as just scalps, but whose stops were never hit. What this means to me in practical terms is that even if I think a stock should go higher, if I see quick hard spike up, my instinct on risk/reward will automatically signal "fade", and will cancel out if not completely override my original idea. I know it never feels good to see a pre-diagnosed move leave the station without you, but sometimes you just have to let them go -- I learn this lesson the hard way almost everyday. Looking to short a break of the lod is usually a good idea, but can be risky if it comes after 8 or 9 down candles on the chart -- then it usually ends up being just a target for shorts to hit and cover into. I have to say though, I take back my facetious comments in my last post; today's SPY chart looked like one hell of a monster to trade. I count 5 break-and-reverse lod's before the final fall -- ugh! Agreed with Nihaba, coming out ahead on a day like today is quite an accomplishment.
Thanks NihabaAshi and illiquid for your thoughts. In answer to some of the comments: I don't look at this particular chart when I am trading, it just happened to be the one I used to post the trades. I have several charts up with multiple time frames and the 20, 69, and 200 ma on them. I see the ma's when I am looking to enter a trade, and I will consider where they are relative to where I plan to go, but the ma's are not in and of themselves a reason to enter. That is, I don't follow an ma crossover system or use crossovers as triggers. If I use a system at all (questionable at times) it is 5 and 15 min support and resitance as defined by tops, bottoms, consolidations and occassionally an ma. Todays first 2 trades were pure momentum, that is, "hey it's going this way, jump on and hope it continues" with a quick look at where we are relative to the top/bottom etc. Not exactly a rigorous criteria. (one reason I have seized on tops and bottoms breakouts is because I can at least recognize them) Todays third trade was based on a large 1min candle that seemed to point toward continued decline. (bearish engulfing) When it retraced approx 50%, I jumped in short. If it starts chopping imediately thereafter, I get queasy in a hurry. This is the second or third time it has been pointed out to me that a break HOD/LOD as a part of a move of some length is generally a BAD idea. Now perhaps after the 6th, 7th, or 20th time I WILL GET IT. I notice that both of the breakdowns that DID follow through came after quite a while (1min chart wise) of fairly shallow oscillations, then the break. (now to see it in real time) Thanks so much for the input... I would hope everyone gets a little something from this.
Tony, these are all basic things that you must know 'cold" before attempting to "donate money to the rest of us" ....I hate to sound like I'm pushing our school, but a lousy $1,000 bucks will save you a fortune.....and even if you came to the Online expo and paid $299 (for you $250) for the 1 day event...you'll will be way ahead). I don't want to bother with the "spam slamming" encountered on the board, but you really ought to PM me about this. Don
Seriously, you have got to be kidding me with this! Is that what these boards have come to? They might as well name this site "bright-trader"... Sad, sad, sad... I guess these retail brokerages disguised as prop shops are not doing all that well these days I know I would be pretty dam embarrased if I were a part of the "firm" and saw the head honcho on a public message board spamming his 1k "course"... cmon Don gimmee a BREAK! Not only are you making yourself look foolish, but your firm as well... BTW; I am sorry for posting this on your thread Tony... Much luck to you on your journey!
I agree with Publias. I am not trying to slam Don. I find his post very interesting and helpful. And I am sure that his course is probably very good as well. I would recommend for Don to try something a little different. Instead of just telling Tony the prem stuff is to complicated to go into detail here and saying he should take your course, why not try this: Briefly answer Tony's question about the prem/discount to fair value. Then tell him that this is a very complicated subject and that in your opinion Tony might benefit from learning more about this subject by taking your course. This is just a thought. It seems like this would be more helpful to Tony and be a better way for you to promote your course Don.
I can't stand people who let everyone know that they are very successful traders either through their website or magazines then come on a forum full of beginners and learners and won't answer one simple question without wanting $$$$ for the privilege of answering it. Don, I am sure answering Tony's question won't hurt your bank balance too much or has this bear run effected your bottom line more than you let on.
I have found some information on some other threads here and am reading up on the subject of PREM. As with most indicators, there seems to be quite a lot of pro vs con on it's application and usefulness. BTW Don, thanks for the feedback, but I make a lousy student. Incredibly hard headed. I will grind away til I make up my mind about the PREM, as I do with most things I learn. Tp paraphrase Winston Churchill... " I like to learn but seldom like being taught" Thanks all,