Try This Trading Insurance Policy
Both major markets are in the red
as we approach midday, with ES trading
slightly south of what had been key 938 support. With intraday trends to the
south following several price vs. momentum divergences, longs don’t excite me a
whole lot for anything other than scalps, unless we move closer to daily support
with a confirming trigger. Traders may also want to keep an eye on the
(
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PowerRating),
which was the early laggard.
And while on the topic of triggers, I thought this morning provided a strong
example of the value of using confirming entries on pullbacks, especially in
markets which are a bit stretched. Specifically, waiting for a one-minute turn
off the early approach to Tuesday’s supports served as a solid insurance policy
against entering longs on what turned out to be a 10-point ES plunge. And while
many times the support fade with a stop south of support in hindsight turns out
to be the prime entry, rather than paying a confirmation premium, as has been
the case over the last several days, using such an insurance policy consistently
can guard against great harm, as was the case this morning.
From the Mailbag – Fair
and Balanced
Lastly, I’ve received a great deal of mail over the last few years as the result
of occasional columns that stir the feelings, many on both sides of the issue. Monday’s
column from the heart (of course all are, it’s just I have more time to
babble at times) flooded the inbox and I’ve posted a few excerpts below. While
there are some out there that would like nothing better than to still my virtual
pen, these letters do a much better job of explaining why I do this, than I ever
could.
Don, AWESOME Piece!!!Â
Good luck with your upcoming seminar – It REALLY stabilized my trading, and I am
having a string of small profitable days to show for my efforts. –S.G.
Don, In reference to your column Monday, your column is something I look for
every day. Not because I am dependent on it. I use it to compare notes and see
how far I got. I have your videos and it helped to see a real trade being put
on. Just wanted to say Thanks and keep up the good work. –M.D.
Don, I just wanted to tell you how much I appreciated your sermon. After being
very successful the first three to four months I traded, reality set in and I
gave all the profits back plus more. My confidence was shattered. I spent
thousands on chat rooms and software programs, looking for someone to do it for
me. Your article really hit home. Thanks again. –P.H.
Enjoyed reading your column today. I got a lot out of it. I don’t follow or have
even studied your approach yet, but I still enjoy reading your column from time
to time, especially when you step back and provide a more holistic view of
things. Thanks for giving us your valuable perspective. Good luck with your
upcoming seminar! –R.R.
Hi there. I enjoyed your Monday column very much. I don’t have the same trading
style/timeframe you do, but I agree with your philosophy and share the same
thoughts on being humble, studying/working hard, relying on myself, and
overcoming challenges. Your message today was very important to me.Â
Best regards,
—F.M.
Don, You are not only a good trader and a good teacher, but you are also a good
person. That is the most important thing: you are a good person and you don’t
find too many nowadays. Thanks for sharing with us your commentary every day!Â
Best regards, –P.C. (Note from Don:
Lest the head enlarge, I have my own faults and demons, believe me.)
Are you sure you’re not Bill O’Reilly?? Fair and balanced and I love it! –F.D.
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