Can Winning Trades Make You Uncomfortable?

 

Stock index
futures opened Tuesday’s session modestly higher after a quiet overnight trade
and on the heels of slightly lower Crude Oil prices and the U.S. Dollar.  The
morning was spent zigzagging up and down as both sides fought for some footing. 
Monday’s NR7 day in the YM set us up for some range expansion, which is exactly
what we got as the futures saw a heavy volume sell-off through Monday’s session
lows.  The futures traded very “pivotal” as bounces off of daily pivot levels
served as good spots for paring profits and for re-entries.

The
December SP 500 futures closed out Tuesday’s session with a loss of points,
while the Dow futures tacked on +71 points.   Looking at the daily chart, the ES
reversed off of Monday’s doji, confirming its Stochs divergence, and broke its
10-day and 20-day MAs to settle right on its broken triangle support line.   The
YM also broke its 10-day and 20-day MAs to settle on its broken triangle support
line.  On an intraday basis, 60-min and 30-min triangles broke to the downside,
leaving room for retracement back up to the broken support lines.  For you daily
3-Line Break followers, the YM and ES both broke short again with new Break
Prices of 10594 and 1190.50 respectively.  In the small caps, the ER2 erased 5
days work as it broke its 10-day MA and settled on its 20-day MA support.


                   

               

Can Winning Trades Make You Uncomfortable?

Have you ever found it difficult to
take a good profit? Ironically, it may be a symptom of impatience
operating under the guise of “letting our winners run”. We’re all familiar
with the 2 basic emotional saboteurs of trading, fear and greed, but I think
when it comes down to pulling the trigger, there is only fear holding us back:
either the fear of losing, or the fear of losing out.
This 2nd fear usually appears when some sort of clock starts ticking inside our
head.  When some cold streak, or simply the lack of a tradable set-up, has worn
our patience thin and our visibility narrows down to no further than the very
next trade. On my worst days, I would be reluctant to take even a partial profit
on any good trade, as if it were the last trade I was ever going to do. That may
be at the extreme end of the spectrum, but any discomfort with ringing the
register may be a sign of some external pressures having manifested themselves
in being overly committed emotionally to any 1 position. It’s best to take a few
steps back from the monitor, splash some cold water on your face, and remind
yourself that this is only 1 trading day out of 240 for the year, and any trade
is but one out of thousands ahead of you.

 

 

Please feel free to email me with any questions
you might have, and have a great trading week!

Chris Curran