I had a good read on the market this morning. The visualization arrows were spot on.
The price action has been very slow and grinding for the past 2 weeks which has made conditions for trading tougher than usual.
I have noticed this week that often after getting a setup, the price will oscillate between the recent highs and lows of the past 30 minutes and often extend both ends prior to making it's move.
This seems like probing for stops in a less liquid market than usual.
It has led to 3 extreme tick stop outs for me this week. Many of my usual winning trades have been getting 3-5 point excursions and coming back for a break even.
I have not made the proper adjustments to the tighter trading of the past couple weeks. As a result I have been hitting my usual losers and not taking the profits on many of my winners.
Conditions like this require wider stops and quicker profit targets and that is the opposite of how I like to trade.
I have entered a modest draw in equity this week but am still up for the month of December.
I am not sure that I want to make any adjustments in times like this. I believe my plan is solid and that the edge will prevail over a large sample.
I am going to continue to post preps and overlays from now until the end the year but the commentary may be lighter than usual due to the slower market conditions.
I will supplement with some trade videos and maybe some technical analysis in attempt to keep things interesting.
Brian,
ReplyDeleteHeard you on Trader interviews a couple of weeks back and I think we, as well as most small contract traders have much in common.
One thing that strikes me is that we are both looking for tight setups in our markets and have a hard time getting ahead consistently because of the market chop. (which you are reffering to above) I trade the CL and NG markets, and I find that my entries (particularly lately) are getting stopped for losses, but at the end of the day the 30 minute setup will have produced a large gain.
I'm trying to figure out how to hang through the losses on the 1 or 5 min chart to capture the gains on the 30 minute. My 30 minute trade tested so far with 47 entries produces winners 72% of the time with a mean of $685.00 per contract. My 5 minute entry has been tested 382 times and is broken down hourly and in the best time frame has a success rate of 69% and a mean of $586 per contract.
The problem, as you well know, is that in between the $586, I may be down $500, up $200, B/E, down $300, and then the day ends with the entry providing $1,000 or more.
Just thought maybe you could relate, and we might start a dialogue and both figure out how to handle this issue in our respctive markets.
Eric Parker
Hello. Thanks for your comment. This is one of the most difficult issues in trade management. I have some thoughts on this and will do a post this week that we can comment on.
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