Thursday's Trading Results

My trading indicates that I should be back on track.

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In the scalps that I did today, on only one of those trades, I entered my stops first before I placed my order. By entering my stop first, I was forced to think about the risk/reward of the trade, and the probability of my trade being a success. In general, it just made me think a little more about what I was doing. Obviously it has not become a habit yet, so I will need continue to work at placing my stops first before I enter my buy/sell orders. So far so good, I must say.

Today was the first day in a long while where I felt good about my trading. I mentioned before that I felt a shift in my mindset towards the viewpoint of patience. Well, it didn't show up in my trading until today. When I missed the morning breakout in RIMM, I resisted the urge to chase, because I kept thinking about how the risk/reward had deteriorated, and I also thought about what the Highly Effective Trader would do. The Highly Effective Trader is fast becoming a highly effective mentor for me.
The other confirmation that I had in my shift towards the viewpoint of patience was in the trade in SU. As I mentioned earlier, I had 3 dummy paintbars on SU on the 10-min. chart. That never happened before, so I felt the odds were good to go long. Of course, as soon as I went long, the price promptly fell $0.20. In the past, I would just bail in order to minimize the pain of a $0.20 loser. However, this time I noticed that the 9bar EMA was not violated, which meant that the trend was still intact. So I resisted the urge to bail and decided to wait for this thing to play itself out. As it turns out, SU obeyed the 9 bar EMA and went on to make new intraday highs. I sold for a profit.

Not sure why I didn't notice this earlier, but more often than not, either the 5 or the 9 bar EMA is a good indicator of the intraday trend, esp. if the two do not cross. That gives me two benefits: I can use it as a guide for where to bail if something goes wrong, and I can also use it for finding the low risk entries.

The market environment has changed, and I think it's taken me this long to adjust. Thinking that I have adapted to changing market conditions is one thing. But the bottom line is that I haven't really internalized that change unless it shows up in my trading. In other words, my trading will tell me the truth as to what I am really thinking. During my recent slump, my trading told me that I haven't really adapted to the changing market conditions. Today, my trading gave me the first sign that I have adapted the viewpoint of patience. There's still so many other things I need to do to improve my trading, but first things first, I will work on patience while the experience is still fresh and lively in my head.

One last thing - Go DECK !!