David Knight -Journal

[David Knight]

Long 2452.5

Got a migraine now so that isn't helping

 

[David Knight]

Sometimes trading is like shooting fish in a barrel and sometimes it is like pulling teeth...

out at 2458 +5.5

Running +8

 

[David Knight]

I don't want to hold overnight.

The reason is because I'm looking for some follow through on this weakness. The chart shows the technical reasoning.

There are other reasons which combine to form a trading idea-

After a relatively heavy down day, other indicies will often follow The US down. So an early low on Weds would be a more ideal 'buy the dip' opportunity than the one I was attempting today.

Time is often just as an important factor as price in identifying potentially good trades...

 

[David Knight]

SHORT 2466

Possible high here at 2467.47

EDit:21,849.24 Possible Dow High

 

[David Knight]

My stop is tight above the current high 2467.47.

Why so close to my entry? Don't we hear all the time that tight stops get taken out?

From post yesterday-

'Time is often just as an important factor as price in identifying potentially good trades...'

If I have correctly identified the high/low (Which is often made early) then-

The market is not likely to go there again SO..

If it takes out the high by the smallest amount, then I am wrong and I want to be out as soon as poss.

If the market continues lower, I want to hold all day if I can/ or at least to an identifiablr target . Today the target is near/through the gap.

Bottom line-

You want a tight stop if you have good reason for it

You do not want a tight stop because you were told by someone else that it's a good idea..

 

[David Knight]

Covered 2462 +4

Running +12

Chart to follow..

 

[David Knight]

The longer a gap stays open, the less likely it will close today....

 

[David Knight]

Today's trade looks like a case of making money even when you're wrong, which is a good trick.

And remember, it was a short trade, which I'm always nervous about, and with good reason when we review the chart.

I managed to grab only 4 pts out of an 8 pt pullback before the market reversed and took out the high by a shade over 1 pt (so far)

Plan Your Trade, Trade Your Plan

Had I stuck with my plan I would have made nothing.

If you follow logical sounding trading rules you'll run into problems and wonder what the hell you're doing wrong.

That's where your real work begins.

'Let Profits Run, Cut losses short'

Somebody needs to write a book...

'The problem with Trading rules'-
41 Shades of Grey every new trader should know about...

My Plan

The next problem is that the next 'logical' trade would be to go short the gap fill above, (if it fills) particularly since the gap below remains open.

But... shorting is not what I'm comfortable with. Otoh trading isn't about being comfortable...

Maybe we could say, it's about being comfortable with being uncomfortable. Well, when you put it like that, I'm here aren't I?

So, if you're relatively new and having a really hard time reading this market, let me say-

Still remains a tricky market.

 

[David Knight]

Short 2466

Target yesterdays gap 2458

 

[David Knight]

Short 2466

Target yesterdays gap 2458

Covered @ 2463 +3

Running +15

Taking too long outside 60 min zone/ Dow had closed its gap

 

[David Knight]

Not convinced the low is in today. Could be the calm before the storm, though not expecting a storm either.

If it does drop 2456-8 is the most obvious target

There's too little conviction in the price action to get into a trade right now.

Apologies for being a bit slow to post today- we had guests, but they're gone now.

 

[David Knight]

Long @ 2458

1- It's the level I was looking for yesterday

2- I don't think the market will drop hard on a friday

 

[David Knight]

Long @ 2458

1- It's the level I was looking for yesterday

2- I don't think the market will drop hard on a friday

Out@ 2462 +4

Running +19

Looking to buy 56-58 during cash session

 

[David Knight]

That looked like a likely high @ 2,467.11

And Dow 21,841.89

 

[David Knight]

Short 2466

 

[David Knight]

Short 2466

Cover 2464 +2
Running +21

Grinding...

 

[David Knight]

The Dow is the strongest and is trying to take out the high, limiting the chance of SPX filling the gap below. May have to wait until next week

Adv/decl supports this scenario

Otoh.. Nas is the weakest and could drag the others down.

I still think the SPX high will hold but we'll stay in the current range until next week.

 

[David Knight]

Short 2477

(gap fill from Aug 1st)

Stop is 2481

The plan is not to aim for the (2) gaps - seems unlikely we'll fill even the first gap before the open.

So , just a scalp. If it carries on down I'd rather buy because... all together now- 'I hate being short'

 

[David Knight]

Cover @ 2475 +2

Running +23

Up to the market what I do next- Long from a gap fill below or repeat the short..

 

[David Knight]

Short 2480

Target 2475

The low is already in at
2,474.52

My platform quoted 2480 slightly before the actual market did see screenshot