A 2 Day Relapse in Giving Up Trading Gains!!!

Marc says:

Hello David.

Looking at the chart we can clearly see you were kind of fighting the market on May 3rd. Fighting and chasing. Even though most of us have a trading strategy in place, we often let our minds trick us, making us believe things are going to happen and they never do. Perhaps our minds get so conditioned to previous days market personality, that it feels almost natural to guess what is going to happen next. We tend to forget or neglect the bigger picture and start making decisions based only on what or how we WANT the market to behave. That coupled with the NEED to make money is just a recipe for disaster. We’ve all done that.
On that day I had a couple of losers (I guess most of traders had) but what saved my day was stepping back and try to figure why the selling was quite unusually strong compared to previous days and realized that big institutions were stepping in and liquidating big positions ahead of Sundays Greek elections, which was the main worry across the financial markets. That was the clue I was looking for to give me confidence to go with the flow. I tend to look at lower time frame charts sometimes and fall into the so called “tunnel vision” situation. I’ve learned how to overcome this problem by doing a detailed morning preparation looking for things to give me clues about the days market personality, like news events, higher time frame support/resistance levels, previous days high and lows and what happens if the market breakout of these levels or there is a fake out breakout. Planning exact what I’m going to do even before the market starts. If market breaks the low of previous day on high volume I can only be a SELLER and vice versa. And I included something in my trading strategy that prevents me from trying to pick tops and bottoms, which is two higher time frame Exponential Moving Averages. Markets interact very well with 20 EMA and 50 EMA on 13 range and 21 range charts. So I use those EMAs on my 89 tick chart and if faster EMA is below slower EMA I can only sell on pull backs and vice versa. This helps me maintain my discipline, protect my capital in bad days and maximize profits in good trending days.
I like to watch the speed of tape rather than volume. If there is good speed it means there will be a possible follow through. When speed starts to pickup in the direction I want, I place my trade and my first target, which is just 8 ticks away from my entry, almost always get hit and my second contract goes to entry minus or plus 8 ticks for a breakeven. If it doesn’t get stooped out I let it run. This gives more peace of mind and allow more room for market if it comes back to my entry price.
I’ve doing a lot of work here for the last few years and I consider myself lucky because I have a way of income other than trading and I still have time to trade the whole trading sessions. That gives me time to trade and learn and puts a LOT of pressure out of my trading because I don’t have to rely only on the income I make from trading.
I believe the pressure to make money is a huge factor that affects the traders psychology and appreciate your courage to be a full time trader. That takes a huge mental strength.

All the best,

Marc