Being In The Moment
After yesterday’s wild ride, I just am having a bit
of writers block. There simply is not a lot to write about given the
nature of trading right now. For those of you who did not read my article
yesterday, please read it. It puts into the most simple terms how one trades
the current market. If you traded like that yesterday, I suspect you easily
navigated the immense volatility and had a lot to show for it at the end of the
day.
I will give you a great contrast in terms of an approach to HVT,
a tactic that is valid, but on longer time frames. HVT
is about being in the moment and anticipating. Remember, your technical
indicators are merely guideposts, not absolutes. Your ability to read the
market, “take its’ temperature,” is the final piece in the trading
puzzle.
“Do you  allow the bars to overlap each
other on a one-minute chart? I found it very difficult to make money
daytrading keeping the stop-loss below the low of previous bar after making
entry over the high.”
This excerpt from an e-mail I received is a great
question. However, when you are trading off of one-minute charts and doing
several dozen trades a day, it clouds your ability to really see what is going
on. For HVT, the
strategy is not what is stated above. It is based purely on your analysis of
where the S&P futures are going in the next few minutes. Remember, keep it
simple.
I am reminded of a visit I made to the floor of the Chicago
Mercantile Exchange (where the S&P 500 futures are traded) last year. Of
the hundreds of traders in the pit, naturally none of them had access to charts
in the moment. Sure, some had headsets and were in communication with their
staff upstairs who were probably calling out important technical levels, but the
essence of their trade execution (the most important part) was based purely on
their ability to “read” what was happening in the pit. What house has
been a buyer at what levels? The look in the floor broker’s eyes? Is he ready to
unload a bunch of contracts into this rally? Etc.
As an upstairs trader, you also have that ability,
granted via different mechanisms. Time and sales is a great tool, moving
averages, the “axe” on a Level II screen. Trading is a game of
contradictions — it is incredibly difficult to master, yet at times it seems
effortless. Keep it simple is the best place to start. Do not get so hung up on
the trade having to be just so. You will miss many a good trade by over-thinking.
Key Technical
Numbers (futures):
S&Ps |
Nasdaq |
| 884-86 | 1016 |
| 870-73 | 997 |
| 846 | 980 |
| 822 | 952 (very key) |
| 810-12 (been a key level) | 928 |
| 792 | 912 |
| 768 | 899 |
As always, feel free to send me your comments and
questions. See you in TradersWire.