I want to begin by saying that a trader has one thing to control just look in the mirror its that simple you can draw all the lines and read all the news you want but in the end if you are not in the Zone you will struggle. When not in the Zone you must decide whether to run and hide or taper down your size and tighten risk in general until you can again feel more confident and start trading your system well gain. Having said that I experienced a somewhat strange but obvious mental block that resulted in poor execution and frequent disappointing outcomes for a period of about 3 weeks in January. My approach initially was to reduce size and tighten risk while a muddled through that time-period. Then one day I woke up and realized that I had inadvertently or unknowingly changed my risk/stop loss methods and had essentially sabotaged my technique resulting in lack luster performance. The day I realized my errors was like an epiphany that resulted in my announcement to some of my trader friends that I was back and I was ready to regain my confidence and experience much better results. You might say it was a swing back to confidence rather than anything else but there was an obvious thing that caused my block which is why I feel a trader must review past trades Weekly if not Daily to see what went well and why or vice versa when trades are not working. Yes the Market's were turbulent but regardless of that they were very tradable and almost better than usual as the moves and Volatility provided wide ranges that could have resulted in excellent profits. The month of February has been seen a very large turnaround for my trading and as it comes to an end I wanted to share this in hope that it would help anyone who has or is in a trading slump. Hindsight is a wonderful teacher use it to your benefit.
Below are some Basic tips that may help :
1. To review your trades efficiently, create a journal or a spreadsheet listing your buys, adds and sells. Then print out the daily and weekly charts of each stock.
2. For each stock, write down the main reason you bought. If that’s hard to do, then you probably haven’t done enough research. Hopefully you didn’t buy on a hunch or emotion alone, as doing so carries greater risk.
3. Next, create a winners pile and a separate losers pile and analyze the charts to see how each stock fared after you traded it. Factors noted should include how your stops would have or did work and eventual Target's to name a few.
4. Use a trading diary for the lack of a better word where you can record emotions during and after a trade and to note times when you added to a trade that had a positive or negative outcome for example.
5. Always have a set of basic rules that you follow based on the findings of the previous 4 items that you do not violate.
There are many more items to list but this is a basic start and you can build on it as you wish and as you further develop your trading.
After a strong rally off the lows late yesterday into early this morning the Market churned and chopped for most of the day before succumbing to a late day selloff as traders cleared there book's before the weekend.The Weekly and Daily $/ES_F charts both remain with a downward bias and appear heavy for the time being with both trading below the 10ema and 50sma averages. Today's action saw the 21sma provide strong resistance on the Daily chart along with the 200sma Hourly chart putting up a block wall. Although the above weakness is evident we still are in the midst of an inside range Monthly bar and have not made any new lows for the move. Interestingly the 30yr Bonds $/ZB_F did not participate as they have recently in an inversely correlated move as the Market sold off with Bonds finishing down over a point. That along with end of the Qtr. and month opens the door for a possible window dressing rally into next week. We will look for clues as the week progresses and judge ourselves accordingly. I have included $/ES_F and $/ZB_F charts for your perusal. Have a great weekend.
Welcome to my trading blog. Although I am not an eloquent writer I will attempt to navigate this blog the best way I know how through chart and technical musings. The charts and setups I will discuss are not only a passion of mine but also an ongoing learning process as the market changes continuously. In an effort to provide quality posts I will try to update this blog as often as possible with relevant information rather than idle babble. I will spend more time with charts and risk reward scenarios than long winded verbal analysis so If you like reading about the potential reasons for what has transpired to cause the underlying price movement this may not be for you. Hope you enjoy and good Luck.