This Is Why I Share My ‘Method’

Given the early strength coupled with the stretching of price from longer term
supports,  traders may want to eye a potential pullback toward 13-minute ES
support as the day progresses, with an even more careful eye on any potential
price vs. momentum divergences to gauge exits should an initial bounce develop.

As many of you know, we completed our second weeklong "Trading Pit" seminar on
Friday, after spending the week developing trader skills and reinforcing the
cornerstone trading concepts provided in the E-Mini trading development
video
and online simulation. Based on participant responses, the effort has turned out
to be one of the most well-received efforts of this site, and one of which I’ve
been extremely pleased to host.

In response to those who have asked how the week went from a trading
perspective, the answer remains the same as that which I provided to interested
attendees of both the March and May efforts before each seminar.  Yet far from
having a baseball glove with "300 Wins" stitched on it before the 300th victory
(sorry, Roger, but after all you did leave Boston!) or joining the growing "I
told you so" ranks of industry analysts and columnists, what I mean is we
simply went about conducting business for a week — the business of considering
options, taking trades, implementing stops, making a few miscues, and booking
successes where appropriate.

The best trades came on the 13 & 60 timeframes which traded at a 89% clip, while
the scalp trades traded at a profitable 56%.  Yet as
Larry Connors mentioned in
his weekend piece, percentages are completely meaningless without the underlying
trade size selection and trade management backdrop, and as is normally the case
it was typically one or two trades each day where we traded full size that
provided the bulk of the weekly profits.  And of course, though the week was
strongly profitable, the results are similar to a golfing scorecard that only
reflects a very small percentage of one’s year, so it’s back to work this week,
and next, and next, and — well, you get the picture.

Another benefit of conducting such an effort over the course of several days is
that we get to experience varying market rhythms.  And while we were still only
limited to a sample size of 4-5 days, the market cooperated as it normally does
with varied pace throughout the week.  In fact, those trading last week will
likely recall that the market provided what this trader would define as one of
the worst trading pace days in recent memory (Wednesday, the one day which
resulted in a slight draw and which had us often on the sidelines), immediately
followed by one of the best paces I’ve seen recently (Thursday).  And Thursday’s
pace continued nicely into Friday morning (before traders headed for the
barbeques) and ultimately this morning, reinforcing the principle that rhythms
change as often as the New England weather … notwithstanding this soggy spring
on the coast.

Lastly, and on a related note, I received a phone call last night from a trader
who asked me why I share "successful methods" with others. As the seminar
participants came to realize, it’s not the "method" per se.  And it’s
certainly not that I have any "magic dust" at this end.  As I’ve often said,
most folks will fail miserably at this game, some failing terribly.  Yet last
week provided a few clues to an effective response for this person.