July 6 2009 ES Trades

It was a good start to the week especially after a long weekend. The premise today was clear. I just bought support at a wholesale price.

I like to use the term wholesale price but you do not know for sure in advance. That is what the premise of your morning prep is used for.

Disregard the entries and exits at 15:25. I fumbled my mouse while moving my stop and fired off some orders which happens occasionally.

The best thing to do in these situations is to exit. If it happens more than once or twice a quarter than you should make an adjustment to your order entry procedure. In this case, I immediately returned to my original position only being down commissions.

I was not happy with the exit on the last contract. You can see I got stopped out at 4 points profit almost at the low tick prior to the late day covering rally. I was waiting for this to happen and was even discussing it with another trader here at the firm.

I got caught up thinking about the round number of 4 points instead of letting the trade work. Had I not moved my stop I would have been risking a break even on that last piece of the position and I wanted a specific ratio out of the trade.

I exited for the wrong reasons (number that made me feel good). This illustrates that it being good at getting into trades that have positive excursions does not immediately translate into profits.

It was still a good trade with a 1.6/1 risk/reward ratio.

There are going to be some exciting new postings here to follow in the near future. I will post an update over the next few days.