I was a bit scared to trade this morning, thinking the worst could happen – a crash at any minute. So I watched at the beginning and buyers were clearly in control. I took two stoxx trades and scratched both, scared of a loss. Both would have been nice winners.
Then I got in on an ES trade and held it for a new high and got a nice win. ES pulled back again and I took another long. ES was too far extended by now and I was pressing my luck so I got a small profit on that one and abandoned thoughts of a new high.
So a couple points here, for me, these may or may not apply to you:
- Often me scratching a trade is due to fear of losing. I need to have confidence in the trade and let my target or stop get hit. Whenever I enter there will always be opposing traders trying to push the other way, I must not let them fake me out of the trade.
- Don’t believe all the hype. Don’t pay much attention to the news. Just watch the market and let it tell you where it wants to go.
That last point reminds me of something:
The selling started way before the downgrade was officially released (after the close on Friday). People knew. The market was saying there was a problem. As long as one followed what the market was saying and not the news (the news said the debt deal would be reached) then one would be on the right side.
I must admit last Monday I was long and I took a large loss. I thought the debt deal would trigger a rally. That was when the selloff started. But after that I traded almost all short and went for big wins and managed to finish positive. Next time I won’t wait so long to join the dominant side. I won’t let my own personal beliefs cloud my judgement. I will just read what the market is telling me.
Good luck today.