I gave myself 2 scenarios to watch for this morning on the long side. It was a detailed plan to either take a shallow pull back or a deeper pull back.
After the price contracted and put in very shallow inside support, I was considering a long but it just did not feel right.
Then the price faked down and moved back above my improvised inside support line. This was an immediate long for me. I wanted to buy the washout but could not do it. This made a significant difference in the outcome.
I took the confirmed long at an OK price but ended up scalping it. I did not want to sit in the position for hours and potentially take a loss due to erratic washout action prior to the move up.
I was almost certain the price would move up and believed in my premise but was hesitant on where to get in. This is interesting. A buy above the blue line in the low volume grind required 3 or 4 points worth of risk if the trade accomplished 1 or 2 points open equity and then moved against me.
It only had 1.5 or 2 points risk initially. So in my mind, allowing the price to push against me after a 1 or 2 point excursion increased my risk to more than the initial risk. So I took a small profit instead of letting it ride.
I am moving towards just believing in my premise and taking a big stop when I am wrong. I am not wrong that often and if I was I do not think it would last over a sample.
Back to the entry point. Had I bought the washout extension, I would have had enough room to let the trade open up with no risk. However, technically, the initial risk would have been more.
There are many ways to play my simple premise as you can see. I think the results will continue to get better as long as I take risks and bet on my premise with conviction.
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