November 16 2009 Overlay, Trades, and Commentary

CLICK HERE FOR HD VIDEO OF TODAY'S TRADES 1 & 4 EDITED TO 2.5 MINUTES

I caught the long just after the open. I prepped for a pullback to inside support at 1094.50 but it was not happening today.

The price was sitting just off the highs and extended. I did not used to be able to catch these. This was actually a fairly clear entry with very low risk (1.5 points). I do not mind buying close to the high of the day if I manage tightly.

This has been an adjustment in my trading style that has produced some good results. I feel like I have the freedom to make bets on what I am feeling and history has shown that my gut is correct far more than it is not.

I exited to long too soon today. If you remember last Monday I rode the trend up 10 points. This was the same general setup but very different price action at entry point. The pullback off the highs was very shallow.

Shallow means strength as I said in last Monday's post. However, this was too shallow. it was not deep enough and just suspect enough to convince me that this market was not going to trend up all day.

My read was absolutely correct but I left 1/2 the long on the table.

Note:

Just because I thought there was a lower probability of a major move up and tend to be correct in premise does not mean I should have been quick to exit for little or no reason.

Being correct in premise and executing profitably are totally separate. The execution is more important than the analysis.

The better course of action is to wait for a good reversal pattern. One that would cause me to get short. I think it is best to just hold these in the future.

Look at the re-entry. Any re-entry in this grinding move move realistically requires a 4-5 point stop unless you are going to manage super tight which is not practical in a grind.

If a re-entry is going risk most of the profits booked on the day than I should just hold my initial position. I am pretty clear on this and do not need to dwell on it.

My second entry was just a long in cast the trend took off. It was a good bet. Basically insurance against having to watch the price move up all day and not be in it. Only cost 3 ticks.

Again, this is part of my new management style. Get a bet in there at areas that could open up and manage tight.

I bought the high tick of the day thinking there would be some buyers up there. I quickly realized there were not and covered with a 1 point loss. I never used to allow this. I do not mind and need to keep hitting these. They will pay off over time.

The short in the afternoon had a clear setup. I was looking for the price to come in deeper but the market contracted a bit.

Overall it was a decent day. My execution and feel is quickly catching up with my reads and the results are starting to show.

I need to continue to allow myself to speculate and hit the areas that I feel are good regardless of what I think the outcome might be.