September 17 2009 Overlay, Trades, and Commentary

We had a decent read on the market today. It was a day after trending sideways market but it was really moving fast in the AM.

I executed an excellent trade in the AM. The first long was a 1/2 position pre-market as the price approached my potential inside support area. This was a blind bet on a zone. I felt the trade so it qualified.

I entered with a 1/2 position because my pre-market trades often get re-tested. This one took off at the open. I did catch an excellent pullback higher low with the 2nd 1/2 of the position.

Note:

I need to make a note of the clarity in concept of the natural area for a higher low pivot off the inside support zone. This may be a little difficult for newer traders to understand.

When the price started to rollover after the open, I envisioned what a higher low would look like. I always know to look for these but lately, I look at them differently (with much more understanding).

As I saw the price moving down, I was not focusing on the price moving down and debating whether or not it would hold or not.

I saw it for what is was which was a natural area for a continuation. That is it. No more thought than that. Then I just bought it without a second thought.

This mode I have been in is a new level of trading for me I believe. I have been repeating my morning goals when I post my prep in attempt to re-enforce this level of thinking. It is easy to get distracted by fear and anxiety.

This process has been working well. I am also trading my convictions about direction. When I feel strongly about something that is in line with my methodology, I take it. I do not recommend this for traders that do not have a complete understanding of market structure. It will not work.

Afternoon trades:

I was up 12 points after the AM session taking little heat. The afternoon was tough.

I traded through lunch because the market approached my inside support zone at around 12:30 PM EST.

I do not like trading during lunch but the setup had to be taken. I had convictions about an upside move even thought there was massive downside structure.

I executed a couple good trades but gave back 8 points in the sequence. My original premise was correct but it was a very tough area to execute on.

Some may ask why I did not wait or try to filter. The answer is because waiting causes winners to be missed. It is far more important to hit winners than to avoid losses if you know what you are doing.

I attempted a late day breakout long. I fought it for what seemed like hours and covered with a few ticks profit after it was apparent that if it was going to move, it would happen overnight. It was the right decision.

Execution was near perfect even though I gave quite a bit back today. The daily number does not matter.

I have to just keep executing and let the chips fall where they do.