Where Does The Edge Get You?
What you want, and what you
get, can be two different things entirely.
What you need, though–is a way to keep what you got,
with the discipline of using money management that’s suitable to your risk
tolerance levels. It’s the demon that lurks inside most traders, knowing when to
say ‘enough already.’ Some traders resort to automatic stop placement when they
place the trade, in order to take the emotion out of the decision-making process
‘in the heat of battle.’ Others prefer the use of mental stops. There’s also the
issue of ‘how much’ should I accept initially and when do I pull the trigger on
the winners, as well as those trades with edge that just aren’t living up to our
long-term goal of making ‘kachingo.’
I can’t tell you the answer of ‘what’s best’, but
I can point out how I saw a recent trade develop, and what action looked
appropriate in my eyes–in trying to maintain the edge in one’s pocket.
11:38:57
Intraday Setup Alert
Electronic Arts (ERTS)
has just broken thru descending
triangle supports. The issue is down 1.65 at 44.27. The pattern was formed
at a potential awareness zone, but not considered ‘key’, as the amount of
technical support is not significant. The intraday break of the pattern, also
breaks the hammer low of the session–which is deemed important to many
technicians.
I really do believe a picture can be worth a
thousand words. This particular trade worked out for those who entered at the
appropriate trigger level–or did it? I honestly don’t know. A trader who took
the trigger might have caught the maximum amount of .70, or maybe something in
between–or maybe the hope that was filled with positive edge, has now turned
into temporary despair. I don’t know, but I do know what I saw–and it wasn’t
catching the bottom. But, at a minimum, some of the positive edge should have
been captured before turning our sights to something else within the realm of
endless possibilities that present themselves each and every day.