Walking On Glass
Trader
psychology and the dynamics of the market change on a dime in this
day and age. Last week there was so much volatility I couldn’t place enough
trades to satisfy my competitive nature. This week my trades have to be
skillfully executed as if I were walking on glass. What a difference a week
makes. The one-minute chart of the S&P futures below shows the last hour of
trading yesterday. Regular readers will notice that there is no trend compounded
by the fact that the moves were not large enough (<3 points). The only
potential trade was the pull-back after the range breakout. However, finding a
stock that followed that move was a challenging task.
I have received several emails from
readers over the last few days complaining about the same thing. There is no
need for alarm, just a re-adjustment. If you were following your game plan and
approaching the market in the manner I do, you would have been stepping up last
week, and retracting a bit this week. This does not mean that money cannot be
made, it just means it is not made with the relative ease and abundance of last
week.Â
Let’s review a few things:
-Â Are the S&P’s and NASDAQ
making adequate intra-day moves to justify entry points on your stocks?
-Â Never, never chase a position,
especially in this market. Admit you missed the opportunity and wait for
it to reset. More importantly, go back and find out why you did miss the
optimum entry point.
-Â Is your stock trading with the
futures? Several of my favorite stocks are doing their ‘own thing’ lately,
further complicating matters.
-Â Reduce your share size on a
per trade basis. I have, simply because the moves are taking a bit longer
to develop and may zig and zag before there is confirmation.
-Â As always, stop losses,
whether they are actual or mental are required.
I will be the first to admit that the
market has been challenging this week, and my returns thus far are certainly
nothing to brag about. However, I am not losing money. I am simply
buying time until a bit more volatility comes back into the market. Given
the political and economic climate, that day is not far off.
There will be no Key Technical Numbers
today. They will be part of the column tomorrow.
As always, feel free to send me your
questions or comments, see you in TradersWire.
P.S.
I’m looking forward to sharing the nuts and bolts of how I trade at TM2001
in early October. You’ll learn the two big keys to my trading: 1)
How to define a powerful intraday trend; and 2) The precise
parameters that tell you where to enter your trade in the midst of that trend.
I will also explain to you the “feel and rhythm” that enables me to
trade with
consistency. This is one element of my trading that I could
never convey on paper through a set of rules or a formula. You’ll just have to
meet me in Las Vegas, and you’ll know what I mean!