I traded today mostly from the short side. I have been trying to trade much less and keep the trades limited to those I rate very high on a scale of 1-10. A few trades made the list today, but one that I didn't take today was one of my best non-trades ever.
On a short term basis, a bunch of the indexes (SP, ND, YM-that's S&P, Nasdaq and Dow futures) were in good downtrending channels. I will include a chart of at least one to show. As the day went on, I was dying to get in a short trade in the dow. I wanted to sell them around 11125ish...but each time it got close, it would go back down to the lows. And then....the time came. The stochastics were overbought, and my target entry was reached. But something happened. The ND, and the SPs also were creeping up...and too fast. They looked a little too strong. The problem is, it almost always looks strong when it's time to sell, just as it almost always looks weak when it's time to buy. The point is, listen to your gut. If something is telling you it's wrong, then it's wrong....maybe not for the rest of the trading world, but for you. And it was wrong for me...and guess what...it rallied hard. I would have lost a bunch. Instead, I switched markets, focused on the S&Ps and watched as it closed on the 15 minute above a resistance level. I took the long, and a trade that started out as a sure short loser, became a nice long winner.
In the end, the feeling of making a good trade is good. But the feeling of NOT making a bad trade is better. It shows discipline. And anyone who knows this business knows that discipline is the key.
1 comment:
Remember the last time I told you to follow your gut?? I think you still owe me $50.
Post a Comment