Thursday, November 20, 2008

Thursday Notes - Managing With My "B" Game

1:33pm For some reason, I've been a bit hesitant today on a day where I normally do well -- yet another morning-after-closing-trend day. That particular pattern just keeps coming and coming. This fall has simply provided tremendous closing trends to fuel the high-probability next morning trade.

The result has been my scratching and reentering a number of trades, and while I often do that to some extent every day for risk management, I feel I've done so much more than normal today, and as a result my transaction (commission) costs have eaten into the day's chip gain which currently stands at a rather modest +$14K. Remember all figures quoted throughout the blog are net of transaction costs. Another area where I'll grade myself rather poorly today is holding time, as my entries -- or should I say re-entries -- have been OK, but I've definitely been a bit too quick on my exits.

Which leaves me heading into the afternoon a bit frustrated, yet extremely cautious not to do anything stupid heading into the late afternoon -- a.k.a. my weaker period -- especially since I apparently didn't bring my "A" game today. Yea, I know it's impossible to bring our "A" game to every one of the 250+ trading days we have each year, but knowing that still doesn't make it any less frustrating.

I'll be surprised if we get another sustained uptrend in the afternoon as (1) some of the midday juice was supplied by the automaker off-again/on-again bailout news, and (2) we're still in a strong 60-min downtrend. If so, the salmon will definitely be swimming upstream.

2:05pm Feels weak. Shorted ES 797.50 small size on a 1 min turn; stop 800.

2:08pm Added small at 795.75.

2:10pm Nice ... covered most -- best cover so far 792.75 -- holding small on free roll for fun.

2:19pm Flattened 788.00 into extreme negative TICK. Not bad. Kept size very modest, took early sure profit, and free-rolled rest. That might be it for the day. Nudged chip gain to +$17K.

2:22pm ES now 4 pts up from final cover. Gotta feed the ducks (emotional retail traders) when they're quacking. Amazing how some markets make you look like a genius while others (hard trends) make you look so lame. I posted the chart with the entry zone circled. 1 min 3LB was also short at the time, and we were in the hourly downtrend. There might be more on the downside as the 5-min is trying to join the 60, but I'll take the high probability move and leave the longer term intraday swing trading to others. Nevertheless, the long-term trend definitely remains down, and if the 5 min continues, there might be another higher-probability pullback opportunity.

2:32pm My personal witching hour approacheth. Still sensing I've had my "B" game today and at times during parts of the week, so sticking to defense for the rest of the day. VIX turning back up & TICK looking pathetic again, but ES trading in the middle of the morning range.

2:40pm Getting tired and ES chopping around. Not a good combo. Careful Don ... keep the sizes small.

2:44pm Considered shorting this 5 min pullback but execution not sharp. 'Twas nice entry for those who got it.

2:47pm No second chances so far on that one. Right read, tired fingers. Should get one more pullback try though ... sitting at 785 to 786.

2:55pm Not bad ... got my fills and took one scratch and re-entry (yes, again), but got some of the drop with best cover 781.25. Chip gain now +$18K. Trend is down but pace sporadic. ES still trading above the morning low, which is another reason I'm clipping quickly.

3:02pm ES 10 point pop. From fool to genius in 2 minutes ... amazing.

We'll close it down here to make sure I don't go back to "fool". Banking the day's gain and going to search for my "A" game tonight.

Any closing trend sets up -- well, you get the idea by now.

Thinking about doing a video later tonight ... stay tuned.

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