lurkerlurker
Senior member
- Messages
- 2,482
- Likes
- 150
If you have a plan to protect yourself, then whatever the market does (and it can do anything) you have nothing to fear. The market does its thing. Your job is merely to control yourself, to define your risk and degree of involvment. If there is a sudden collapse of this parabolic move and you are long, so what? Assuming you had a stop in the market, you were out at -10 or -20 (or whatever loss you had already defined) and waiting patiently for another opportunity. Those who are terrified and make rash decisions are the ones that pay you. It is our job to capitalise on mistakes, volatile emotions and fear. There is always another opportunity and usually a better price.
People can be made uncomfortable by the market because it presents no boundaries. You are free to trade for one minute or hours on end, once a year or several thousand times a day. Your work rate does not pay in the conventional sense. So you need a plan to set boundaries in this weird abstract unstructured environment. If your plan has a solution for anything the market throws at you and a way of defining and structuring the price action in a way that makes sense to you, trading will become peaceful and objective.
I'd advise against developing an intraday trading plan which assumes anything about the stage the market is in. It's never too high or too low and it can keep going or turn on a dime. In fact, if you are the type of day trader who likes chipping away for frequent small gains, there are almost always good longs and shorts to be had every day. A good setup will work in any type of market.
However, while it is unhealthy to assume anything about the market condition, if there is an 'obvious' longer term trend in effect* then you are can consider biasing your trades to take advantage until conditions change. But you need to define a 'change of condition' in your terms: e.g you might say that until a 30 minute bar closes below the mid point of the last three days' action the longer term up trend is intact.
Then you just have to work out what must the market needs to do to cause you to enter and exit. Let it define your trades on your terms. Live in the present. It's a joy when one truly accepts that he doesn't have to predict what the market should or will do when he can simply react to what it is doing.
Apologies for my wearing an ill-fitting guru hat again and no offence intended.
*it will be equally 'obvious' that the market was ripe for a savage three day correction, about three days after it starts.
But then again I am a terrible position trader, so I scalp for ticks all day long and have a delightful mousemat callous to show for it. Eeuw.
I'd disagree about your assessment of the guru hat. I think it is fitting rather well! Thank you again for your input. Regarding the psychology aspect, I've been reading Mark Douglas again - results should manifest in my P/L shortly. Furthermore, I've developed a new method which I would hope you would be good enough to comment on. I think it addresses some of the main issues, however it doesn't trade very often. Perhaps this is what is needed.
