September 2 2010 Trade and Performance Review

I traded the ES only today. I have not seen much to exploit on the TF this week and have correctly reduced my trading there in the short term. The TF is the one who has been doing most of the exploiting in fact.

I will go where I see an edge.

I suppose the ES and I have reconciled but the TF will remain my primary production vehicle as time goes on. I have an excellent system for using one index to initiate beginning scalps then doubling down on the other.

It is interesting how one sometimes leads the other and vice versa.

I finally capitulated and started trading the day after trend congestion and had good results today.

It is clear that after the price makes a significant move, the highest probability outcome for the next day is a sideways market.

I prep for this and have been aware of it for some time but have always been reluctant to engage it fully. Mostly because the risk in undefined.

Price rarely stays within a high and a low and is prone to wash stops above and below the congestion. Sometimes pushing 25%-50% outside the congestion.

Due to the fact that I have been specifically studying these squeezes and pushes for the past few months I have gotten more comfortable fading the top or bottom of a congestion with no stop with the expectation that the congestion will hold.

I will occasionally get run over but can no longer ignore the one of the highest probability trading days a trader can find.

I also have fine tuned my feel through studying and drilling and could just sense that price was going nowhere today. I really did not sweat my entries today until the last one and that was for good reason.

While I firmly believe that fading trending or extending markets is a losing proposal these day ofter congestion deserve their own classification.

Moving forward I will continue to aggressively play these even if I get bitten occasionally.

Performance

I have been trading well primarily due to developing some of my own techniques for identifying squeezes and pushes as well as refining my ability to tap into my correct gut feelings about where the price is going.

I have been able to manage my trades confidently and identify my areas of entry well in advance.

I need to remain level headed about this and try to keep it as simple as possible. I can break my technique down to many levels of complexity.

The important thing to keep in mind in order to continue to make the correct decisions on the hard right edge is to is allow my gut and subconscious to tell me where to execute.

There are too many reasons to consider for taking or not taking a trade. I do not believe somebody can expect to have a list of rules or qualifiers to run through every time they execute an entry or exit and be able to avoid all the traps and fakes out there.

The price is designed to bring a retailer in and squeeze them out. Proper training, drilling, and practice can develop the correct internal sense of what to do. Then one must be able to filter their feelings in order to "tune in" to the correct internal feel.

I do not want to talk too much about my day to day performance because it generally leads to bad streaks.

I have posted a chart above showing my winning vs. losing days since July 1st. It tells a lot about how an equity curve unfolds.