August 16 2010 Trade Review

I had a tough day on the TF today and spent most of my time playing around mid range which is completely against my strategy.

I could not get my bearing on exactly where the boundaries were this morning as the price made a new local low in the middle of nowhere.

I started to engage the price once I could sense a low being put in and a reversal. My tempo was decent after the first long then I re entered later sequence after the news release.

The exits on the next 3 longs were too soon and I only netted 5 ticks on the sequence. This lead to some over aggression and a late sequence stop out on a shallow congestion near what I believed was the top of the range.

Everything was OK up to this point then I started watching the ES and started to get the feel for a squeeze. This was a good play and correct premise.

The mistake was switching back t the TF and not adjusting for the much larger volatility. I entered too soon on the TF. There was quite a bit of air to the down side and potential contraction low.

The players decided to trap the longs and inflict some pain prior to squeezing the shorts.

After the second stop I became irritated and started fighting the market which resulting in a 3 extreme low tick stop. I do not even thing the chart plotted the price I got filled at.

I then again doubled down and hit one last long. This was not a guess. I knew I was just low ticked and had to re enter. Another stop here could have resulted in a near record intra day sequence draw but I had to execute. I caught the squeeze into the close undoing most of the damage from the afternoon.

I put an end to my month + long winning streak with some sloppy management followed by over aggressive compensating.

It is notable that all the action occurred inside my SR lines. This is indicative of an overall locally contracting market and makes for tough trading on a day like today. Anytime you play mid range winning percentage is cit nearly in half. That is the nature of engaging mid range.

I have to reiterate today than many of the players are on vacation and there is pretty much nothing but games going on right now. It is a turkey shoot for those providing liquidity and pushing the price around while taking retailer's money.

It is best to hit quick high probability trades and exit with tight profits in this mess. Even though there are plenty of opportunities, just about everything is a contraction on one time frame or another. Things will pick back up in September.