Continuing Education
The old saying that you can always learn something
from someone by just listening was again proved correct this past weekend. I had
the good fortune to attend Kevin Haggerty’s seminar out here in Santa Monica. To
say that the weekend was valuable would be an understatement. Contrary to what
some may have come to expect from seminars in general, there were no "Holy
Grails" of trading revealed, nor should there have been, since they do not
exist. Instead, what the attendees received was a non-stop barrage of Kevin’s 35
years of trading experience. That was invaluable. It reinforced without a doubt
that true mastery only comes with repetition and adaptation.
There were a few people who commented that he was a genius, and while that
may be true, his knowledge is not from some higher level, it is from cutting his
teeth day after day. His approach is second nature to him, just like it will be
for you if you do the following:
- Choose a game plan that works.
- Do not abandon it when it lets you down. It is probably more a function of
you anyway. - Continue to implement that plan without hesitation and make adjustments
when necessary.
For me, I walked away with a much better understanding of trading on all time
frames, especially from a longer-term perspective. I learned, for the first
time, that high-probability entry points (in fact better entry points) can be
achieved at the exact level that everyone thinks the opposite, as Kevin calls
it, The Lowest Common Denominator.
Beyond that, the most important lesson was that a relatively simple approach
seems to work the best. All of your indicators are useless without market
dynamics to support it.
"The pattern doesn’t make the
trade, but the market dynamics do make the pattern."
This quote alone will pay every trader many dividends
over the years. It also answers the age-old question as to when to enter and
exit trades. There usually is not an absolute answer. The answer comes from
taking the temperature of the market.
Yesterday’s action was certainly a recipe for an early
day. The first hour did offer some great setups from an HVT standpoint.
Unfortunately, the remainder of the day offered little to no HVT
setups as the market meandered sideways (the NYSE chalked up its lowest volume
for one day). The energy stocks, Dynegy
(
DYN |
Quote |
Chart |
News |
PowerRating) and Calpine
(
CPN |
Quote |
Chart |
News |
PowerRating),
were very strong on the opening. That was
essentially where my day was made. The rest of the day provided a few
longer-term trades, but nothing to write home about.
The level labeled "KTN"
on the Dynegy
chart will probably raise some questions, so let me address it. Many will ask:
"Why take that trade? It is below the moving average, which is a trade you
rarely do."
Very true, I rarely buck the trend. However, rules are
meant to be broken. The ONLY reason I took this trade was that I had a KTN
at that price level, $7.57. Without that, I never would have taken the trade.
*You will notice that until we break out of
the current trading range, many of the KTNs will reappear on a daily basis.
Key Technical
Numbers (futures):
S&Ps |
Nasdaq |
| 1130 | 1364 |
| 1125 | 1344-47 |
| 1111-13 (confluence) | 1333 |
| 1104 (key resistance) | 1320-23 |
| 1096-98 | 1303 |
| 1087-89 | 1280 |
| 1079 (confluence) | 1258 |
| 1069-72 | 1237 |
As always, feel free to send me your comments and
questions. See you in TradersWire.