Monday, January 14, 2013

Mon: Don't Play Chopsticks.

Today might have been frustrating for a lot of traders.  Good traders make their money rain or shine but for the rest of us struggling retail traders, today provides a lesson in patience.  If you did nothing, you probably did okay.  If you overtraded and lost too much today -- it's important to fix this urge to overtrade a chop day.

Around 15 minutes in the ADVN-DECN spiked and dropped and that was the only ideal entry of the day.

The key here was to be responsive and short and newly established Trend Line that had formed overnight. You had to have the courage and conviction to attempt to short into resistance and then hold for a drop back to the lows of the day.  And the entire move was only about 40 ticks if you did it perfectly anyway.

I can see the temptation to look at something like /cl with a 125 tick range today -- but if you're going to be distracted by 'action' I think you can get burned.  I am suffering from lack of sleep and in the end, I did not lose money today.  But I did learn something -- a reminder to be MORE RESPONSIVE when the advn-decn and other Market Signals appear to be mixed.  There won't be a big trend so the only big move is to play the edges.  

The chart shows the big resistance line /tf formed today. 

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