Very tight action today. I was looking for a pull back to 1210.50 and premised for it on the prep.
When some early AM support built at 1212.25 I took a shot at a long and cut it quickly for a small loss.
The only thing notable about the trade is that I did not give it any room at all. The stop needed to be at least outside the low.
My thought was that if the price did not take off and moved below my entry point after the excursion, that it would likely hit my initial pull back premise of 1210.50.
This would mean that I would have at least 4 points risk in the trade if I wanted to give it appropriate room and I was not willing to take the risk.
I felt I could just re enter which I did later in the day for a small win and ended slightly positive on a slow day.
I am still working on allowing my trades enough room to work. The difficult part today was giving the first trade room because the trade was not part of my planned premise. The price had not tested 1210.50 yet.
When I have a losing trade, I want it to be because I am wrong. Not because the market makers and other players push me to exit out of a winning trade. This requires confidence and a thorough understanding of structure.
There is no other way around it than to take more risk and trust that I am right far more than I am wrong.
Earlier this year, I thought I could repeatedly cut trades and re enter. I am phasing this strategy out because I have determined that on a particular entry, there is no way to know in advance whether the price will push a little further against me the anticipated.
There are micro structural signs and nuances that give warning that this is going to occur but whether it occurs on a given trade is completely random thus can not be played with discretion and produce a consistent outcome.
The only solution I have to this is to make the market prove me wrong and that requires more risk. Executing in this fashion has already moved my trading to a higher level.
I will review this topic more in the upcoming weeks.
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