I was amused by a friend who wrote to tell me about his friend's winning (a couple of thousand bucks) in crude oil yesterday. The end of the note cracked me up - "WEEP", he wrote.
I didn't trade at all after I got out from my long yesterday. Experience told me it was going to be one of those uptrending days that I haven't the proficiency to trade. I watched price climb laboriously from the level where I had chosen to close my trade (at 97.58 - I was definitely DYING for 98 for a nice 1k profit, but the plan was NOT to trade through Europe open, so I got out when CL gave me what I initially planned for ie. a breakout that went a certain distance) to 102, and then from 102 to 103.6 during Sydney open, without ever wanting to get in for a piece of the action.
The thing is, days like yesterday are simply not my department. I totally love a downtrending day, but I simply can't trade a day that keeps going up, because the way that market goes up (the kind that you know will never really reverse at the end of the day) is entirely different from the way it goes down.
In any case, I'm always interested only in the first and last leg of a move whether it's an up day or a down day. I am totally aware that it sounds stupid, since we know for a fact (a fact according to EW practioners that is) that wave 3 is never the shortest wave. So my choosing to avoid a wave 3 effectively puts me in a situation where I'm always trading the shorter/shortest legs, which I'm totally fine with. As far as I'm concerned, the best trades are the ones that I am most familiar with. I am simply much better at feeling the start and exhaustion of a trend, and am hopeless at trading a pullback.
So that takes care of trending days. My personal favorite is a day that U-turns at least 3 times . I love broadening channels, simply because the move up to the ceiling or base is just not as backbreaking as that of a breakout trade that covers similar mileage, AND I don't have to refer to days, weeks , MONTHS before to gauge a realistic target. When it comes to profit taking, I look at the session I choose to trade, and the time of the session that I can trade, and set my targets accordingly - the factors that I take into consideration are mainly volatility (varies across all 3 sessions) and chart patterns (also explains the reason why I like late day trades - patterns take time to complete).
And that is everything that I want to say about why I frequently leave too much on the table. I don't know why I am explaining. It's HIGHLY likely that I'm starting to feel A LITTLE irritated by CONVENTIONAL WISDOM. If I've never complained about not having taken at least one-eighth of what market offered, then no one should feel sorry for me. And if I like to trade just one contract regardless of my account size, that's also entirely my business. I am learning to trade well, and I can't possibly do that with size right at the onset. And not forgetting of course, that starting with 1 contract allows me to average down to the point that I bust my account.
NOW, I am happy.
Today's trade and this week's PnL:
|Hourly - Click to Enlarge|
|5min - Click to Enlarge|