Apr 022012

The signals worked great today up until the runaway move that kept going higher.

The first short had bad trade location  so it was easy to avoid that one.

The next 3 signals worked perfectly and I got 2 pts on each one.

Then the shorts..  by then it should have been obvious not to fade this but I decided to try it.  Lost 3 pts on that one and I would have lost more had I not added on at the top.  My trade location wasn’t good, I got got short ahead of the NVPOC with an open gap target above.  That was my fault and I deserve my loss there.  Still finished up 3 pts though plus I had a small stoxx win so even with a stupid mistake, it was still a good day.

This raises a good point about the signals:  We can’t just trade them blindly.  We have to verify our trade location, our risk, and our reward.  My first three ES trades had low risk (< 2 pts) and good reward (although I always find an excuse to close them out earlier, but 2 pts is an improvement over the 2 ticks I’ve done in the past).  On my 4th ES trade, that entry needed a stop of over 6 pts (to be beyond the 15.25 open gap) and I shouldn’t have taken it, or at least I should have waited until my risk would have been 2 pts, which meant entering right on the gap, and by then it was obvious that shorts were not working.

So with a little bit of logic we can avoid bad situations and do quite well.


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