April 30 2010 Overlay and Trades

I just refuse to get on the short side regardless of how weak this market looks in the morning.

If I was to short into 1201.25 this morning does that mean that I should short into an inside support area every time the price comes off a high in a major uptrend?

The 1208.00 minor support zone I plotted earlier this week turned out to be a major projection. It got hit to the tick in the Globex session then we got the big intra day correction.

Negative

I have to be hard on self over the performance this week. I have been reading the market extremely well and feeling my trades better then ever but spent the entire week hesitating and chasing executions that I knew are good.

Today was especially weak. I wrote in my prep to short a break of 1201.25 but did not. Then I refused to bid into the low at 1195.00 but then chased the bounce and put myself in a situation to get my money taken.

That low tick was not bad luck, it was orchestrated by traders who are better than I am. I should know better. I have to be better than that if I expect to make it in this business.

I produce a damn accurate blueprint to follow every morning.

The other issue today is that I felt it in my gut that I needed to lay off today. I may have created this loss well before the market even opened.

I have huge intuition that I have not yet mastered. Regardless of what I thought, there is no way I am going to stand aside even if a bad day is assured.

I turned a small gain on the week into a small loss. It is especially irritating because I have been on a good pace.

The failure this week was not due to a bad day today. Bad days happen. I am going to be wrong or not on top of my game one or two days a week.

The failure was due to consistent weakness in playing my convictions. Period. I had huge opportunity this week and blew it. I am only capturing bits and pieces of what I see every day.

I am not going to win by avoiding days like today. They are not avoidable. I am going to win by capitalizing when I am right.

The other issue is a performance issue. The other way I see this is that it does not matter why I did not come in and win today. It absolutely does not matter.

The fact is that I needed to step up and pull through and I did not. That makes me a loser this week and makes my effort an amateur effort.

I can not expect to get anywhere if I do not start winning on days like today. There is no method, adjustment, or coaching that will help with this issue.

This is about whether I am a winner or a loser. It is plain and simple.

I am extremely agitated this evening and full of negativity. I thrive off negative reinforcement. Some say that is bad but that is people like me are.

I tend to perform best when I am against the wall and consistently blow it when I am doing well. This is a defect that needs to be corrected. Victory is the only way to fix it.

I have a sense for how big of a problem this is and it is almost overwhelming to visualize getting through it at this point.

I have seen one too many closeout Fridays go this way in the past year and a half and I have to admit it has gotten to me this time.

I know I am better than this otherwise I would not be here.

Observations

The design and flow of my equity curve is becoming clear to me. Many do not think about this. How does profitability look?

Most traders think when and if they get to where they want to be that someday they will wake up and just plain understand what is happening.

Then they can come in and win everyday. It does not work like that.

Profitable trading is a series of advances and pullbacks. Two steps forward and 1.5 steps back and so on. Then you have the occasional winning streak countered by the occasional blowout.

I am fairly certain that my down side in a sequence is 6 - 8 points and my upside is 6 - 10 points right now.

This is a small edge. I am not going to improve be reducing my 6 - 8 point down side. I need to improve the 6 - 10 point upside.

This is a powerful observation.

I ran up 10 points from last Friday to this Thursday and gave back 6 today. After commissions my edge is two points or so.

Had I not hesitated or skipped some key executions this week, my upside had an additional 6 - 10 points if you factor in some losses.

That is solid profitability.

So in terms of the DNA to my equity curve, I need to be able to run 12-20 points in the positive and then draw 6-10.

This means I can risk 3 big stop outs to accomplish 3 or 4 medium wins. This is do-able.

Especially with my prep and premise.

The other observation is that I have won 4 of 5 days for the past 3 weeks. Day 5 has been ugly each week.

Again, I do not need to eliminate the loser, I need to refine the winners and that is best accomplished by not being a coward and hitting my areas with conviction.