January 14 2010 Overlay and VIDEO Commentary

CLICK HERE FOR TONIGHT'S COMMENTARY AND DETAILED REVIEW OF HOW TO IDENTIFY A MICRO BREAKOUT VIDEO IN HD

Check out tonight's commentary. I did a short review in detail of what I call a micro breakout entry pattern.

I did not have any trades today. I had a long order in just after the open and the grinding tempo at open caused hesitation to show itself for the first time in weeks.

I canceled the order about 5 seconds before it would have been filled. I do not really regret it. It was a gut decision that was made for the wrong reasons.

I have been talking about being a little less aggressive in this grind and using phrases like premium setup lately. The micro breakout this morning was an aggressive non-premium setup and I passed on it.

I know when I skip a trade for the wrong reasons because I get a feeling in my gut like I have been caught red handed doing something I was not supposed to be doing.

Hesitation and My Own Bizarre Psychology

Traders tend to be eccentric and I am no exception. It never ceases to amaze me how I can skip a trade and then root against my initial premise to feel better about my failure to execute.

This can quickly lead to stupid decisions and my #1 problem that I do not talk about much which is fading myself. (we will review this someday. It is mostly cured.)

I knew I was doing something wrong when I hit that cancel button. As soon as I did it I immediately started watching for signs of a move down to test the lows (the trade was a long).

It was not because I wanted to be short. It was because I wanted to be vindicated for canceling the order. This is outright self destructive.

The silly thing is that my gut and intuition for trading is so strong that I knew with almost a certainty that the price would move up. However, I would not allow myself to re-enter.

My trading capability and intuition is strongest when I know I have done something wrong by bailing out of an order or exiting a trade I like too soon but am not able to allow myself to re-engage due to fear of making a sloppy entry and losing.

I need to figure out how to turn that on in normal conditions.

Then my level of irritation will depend on how successful the trade would have been had I entered.

For example, today I was initially irritated then felt better when the price retested my entry multiple times and failed to give me a clear exit prior to reversing after a 4 point excursion.

Had it extended the highs I would have been highly irritated.

If it would have turned out that I avoided a stop out, I would still be irritated and writing about how I did the wrong thing even though it work out this time.

Every outcome is negative when I hesitate. The solution is simply do not ever hesitate. It is much easier said then done.

I could not bring myself to just stick the order in after I missed the fill. What goes through my mind then is the though of getting stopped out an a sloppy entry that I hesitated on initially.

Since I missed the trade I did a small review of exactly how to identify what I call the "micro breakout."

It is worth checking out the video. I will start hitting some good winners soon and we can start mixing in some execution videos with the commentary.