September 23 2009 Overlay, Trades, and Commentary

Check out 2 videos of trades from today at the bottom of this post. They are edited down to 5 minutes with audio commentary.

Had another decent inside support read this morning.

I took a breakout short into inside support which is a nice setup I have been using over the past few weeks. The plan is to hold if it cuts right though support or cover if there is any real buying at inside support.

Inside support almost always holds with this kind of structure. I scratched the trade after it approach the inside support area and moved of. I wanted to comment a bit on this.

Stop Adjusting Trades Based On Projected Unconfirmed Contractions:

The break even was not a big deal but I have noticed a sequence of adjustments I made because I "thought" the market might contract.

When the market paused inside of the actual 1064.00 projected inside support zone, I immediately went break even with the thought that I did not want to get caught up in a symmetrical triangle.

I have done this 3 times in the past month with bad results. This is because contraction is usually less probable that full bid to offer or offer to bid. I am managing trades based in a less likely occurrence.

This way of thinking made me reluctant to engage the afternoon selloff today even after it was obvious. I can fix it right here. The process of writing about it will likely work.

From now on, I will manage the original premise and allow for losses due to contraction. The market will have to contract to take me out. I think this is a more appropriate management style instead of anticipating something that usually does not happen.

Of course, the first time I implement this, the market will contract and stop me out. This is how trading goes. That is fine. I will win over a sample.

Trade #2:

I took the early and aggressive no confirmation entry. I like to see this in my execution. You have to have a bit of gamble in your trading at good zones.

I took a small loss on the trade. Smaller than usual. I took 3.5 points heat twice on the same setup yesterday but only allow 2.25 today.

I had more of a downward bias today but need to note that I managed it too tight and got low tick. It would be more of an issue had I not re-entered the long.

Trade #3 Failed Extension Micro Pullback:

This is by far my most profitable trade. It still scares me to like a trade. I am used to the trades I like not working and the ones I hate preforming well. This is how the psychology of the market works.

I bid into a pullback in an area where most are selling. It is worth buying just because it could be the low of the day. With proper ratios, it is hard to lose on this one over a sample. Its not easy though. Nothing that makes a profit is easy.

I covered 1/2 after about 2 hours of grinding up and decided to gamble the other 1/2 on the Fed announcement. My gut said to stay with it and the structure and premise was up. This is all I need.

I went out for coffee and oatmeal and left the position on. I was willing to risk all the open equity. It was the right thing for me to do.

I held into the announcement and covered into an extreme high. It turns out that I left some on the table but that is fine.

It is rare to get long on an extension low outside the range and be able to hold and cover in an extension high outside the range.

Overall good trading today.

I have 2 videos with audio today including me talking through the trade management during the Fed announcement.

CLICK HERE FOR VIDEO 1 SEPTEMBER 23 TRADE #2 STOPPED OUT LOW TICK VIDEO

CLICK HERE FOR VIDEO 2 SEPTEMBER 23 TRADE #3. BOUGHT THE LOW OF THE DAY. LISTEN TO ME TALK THOUGH THE MANAGEMENT OF THE POSITION DURING THE FED ANNOUNCEMENT VIDEO