Am I trading Forex again?
There are days when scalping (I kinda like the word now so I think I'll adopt it
) just doesn't compare to trend following and this was one of them. In fact the last two days looked absolutely perfect for the sell x breakout 'n' cover near the close posse.
Still, not a disgraceful start to the New Year with +44 from two. There was a time when a day like this would have killed me as I have a long running irksome penchant for thrusting my paw in the way of falling swords, but not this time, thank Douglas. "The Disciplined Trader" is brilliant imho and I recommend it for anyone who wants to be "supercooled" while they trade, avoiding "forced awareness" even when the price action is as hot and confusing as Daphne's shed in summer. I need to digest his prose six more times, of course; nevertheless I have not been affected by a few simple concepts in this way for a long time (jaded old Clanger!) 20% method 80% in your own head. It's true you know. Well, you did, but it takes us pink wooly creatures longer than average to work these simple concepts out.
A sextet of possibly interesting observations (probably wrong: remember, I am a relative amateur compared to many on t2w, despite Roberto's kind accusation of my being 'gifted' lol I wish, I'm just trying to survive) for me today. Any glaring errors corrected by those in the know will be very gratefully received.
1. If a gap is filled and the price continues in the same direction then a prolonged trend in the same direction, often to the close, is likely. Thanks sandpiper.
2. A nice 5 waves down through the day, although the 5th wave went a bit crazy after Greenspan warned of irrationality of some sort (that'll be his, then. Lol. Still if he helps my comp entry who am I to complain... :cheesy: )
3. During the first hour or two there was divergence among leading indices. e.g the BIX was up while the SOX was down. Naz was down heavily, Dow was very resilient. So I was looking for reversals at S/R, not a trend day. This helped my first trade of the failed triple top around 15:15. But at 6.30 the BIX fell into the red at last and the Dow promptly accelerated to catch up with it's friends. This said watch out it might become an ugly trend day, which it obediently did.
4. The 3 point stepped bottom (or 5 waves down on the 1 min, like, whatever) between 19:05 and 19:50 was picture perfect. It also came dressed in alluring positive divergence from the houses of TICK and RSI. But look how an early entry on the little divergences could have mashed my account. I was VERY tempted to enter at 640 around 19:38 but in a brutal downtrend with no obvious support points wait and see was the answer. No need to hurry. Do I want to rush in? No! Voila, as China would probably say, the 3rd visually 'obvious' geometrically related by degree (?a320
) peak presented itself at 19:50. No I didn't take it cause I wanted to protect my 44 points (erroneous thinking I know, but it was the first time I'd traded for 2 weeks and I was nervous) but it proved to be a good place to enter.
5. The 100 EMA is a very useful line in the sand on trend days. Chartman pointed this out er, let me see, about four years ago
yet still I fail to give it the respect it deserves. 'Always watch price in relation to something else'. See the darksiders recoil!
6. Interesting how TICK has vacillated between +/- 500 over the last two down days. In an uptrend it seems to vacillate between 0 and 1000. On a range day, perhaps -200 to +700, dunno about this, got to look at itmore closely. Either way TICK is an undervalued indicator imho.
Enough of my rambling anyway. Cheers folks.