March 25 2010 Overlay, Trades, and Commentary

Today was an an interesting day. I had a good read and put together a detailed blueprint of what I was going to do before the market opened.

There is a key argument to discuss here.

Should I lay out my blueprint and trade it with confidence and not trade when the market is not conforming to my blueprint or should I modify my plan and trade what I see happening on the ground that moment?

Blueprint vs. reactionary

Today featured both options and an unforced error.

Trade #1 was not on the prep. I took it because the market was looking like it was not going to pull back to my blind inside support area.

It did pull back just shallow of my blind inside support and low ticked me. The low tick could have been avoided by trusting my zone and taking more risk but I do not want to discuss that right now.

Trade #2 was an obvious setup for me and well executed. Had I followed my blue print, I would have not been in trade #1 and taken trade #2 but had I followed my blueprint and the market not pulled back to my blind inside support, I would have missed the move.

Trade #3 was an unforced error. If you read my prep comments, I specifically said the plan was to short after an extension and move back inside resistance.

I got too caught up in wanting to be long and ignored the fact that the price traveled way too far above resistance to be in line with the mechanics of trade I wanted there.

I was not a bad trade but I took it for the wrong reasons. The right trade was what I had on my blueprint.

Trade #4 was likely to be squeezed and I knew it when I executed. I had to take it. I thought the price would test 1160.00 and it did but not before a nice short squeeze stopped me out for the third time today.

Trade #4 would not have been in play had I taken trade #3 according to the blueprint but trade #4 had to be taken according to the action on the ground.

I did mostly the right thing based off what I was seeing but did not execute according to what I envisioned as a speculator before the market opened.

My talent right now is much stronger as a speculator visualizing how the market will act than as an executor reacting to the market's actions.

Perhaps I should focus on the blue print and execute with more risk and greater confidence.

The blue print does not get faked out but it can not play some days. The reactor gets faked out often but builds great skill in execution over time.

The blue print wins today.