Tuesday, November 11, 2008

Tuesday Notes - Solid Afternoon

5:20pm Well, we finally got some decent pace this afternoon as ES had shorts scampering by squeezing all the way to the 60-minute trend brick wall (and just south of Monday's close) before doing the old Wile E. Coyote drop to resume the downtrend.

At this end, I did well to recognize the pre-2pm turn up and got out of the liquidity-providing game and into "short the emotional extreme" mode -- a transition I don't always make cleanly as I sometimes become of of the "squeezees". In doing so I caught several short entries along the way around the 2:02pm, 2:20pm & 2:34pm exhaustion spikes, and covering each one as the emotion subsided. Of course in doing so, I never end up holding the last one quite long enough, but either you pick the final one and hold or pick each one and clip ... I prefer the former and the financial outcome is often the same. Plus, you can never anticipate the "final" one, as it can be one, two, three, or more spikes ... and if anyone ever tells you they can, I've got some swamp land to sell you.

And yes, under the right circumstances I do short-scalp with a declining VIX -- and it indeed plummeted on the price squeeze -- as it, just like price, can become stretched as rational thinking gives way to emotion. And I love trading contra-emotion.

I was also fairly aggressive with respect to size, while taking sure profits, both of which combined to grow the day's chip stack by just over +$23K. Last night's post seemed to help, and I'll give some credit where credit is due ... to the 4th quarter awakening Celtics.

A reminder we'll open the PalTalk lounge at 6:30pm ET on Wednesday. Look for the "Don Miller Trading Lounge" in the Business & Finance/Trading room list of PalTalk for virtual drinks at 7pm ET.


123 said...

Hi Don, it's great you blog - gives traders the opportunity to set realistic trading goals because they can identify with what other professional traders are doing.

Don Miller said...

Thanks Adam.

May the market be with you.