OK, let's see a show of hands of everyone who "didn't believe" today's action. Such was the topic of this afternoon's team wrap-up where many referred back to their prior trading selves when they would have gotten destroyed trying to short today's market. Yet none of the team got hurt today, most made money, and one teammate from the last Jellie effort maintained his incredible run of 22 out of 24 days profitable ... which is starting to approach my ridiculous 58-3 Q1 2009 run ... keep it up Marco!
So how did the team avoid trouble?
Well, the day -- which started shortly after 4am ET -- began with a strong short bias on any approaches toward Wednesday's key resistance points. And such worked very well during the Europe session (1044 resistance) as well as after the GDP data broke (1050ish resistance) as shorts paid nicely.
Yet as the U.S. session wore on -- and after one stopped short sequence on a double top attempt -- it became crystal clear that the bias was long on price & TICK pullbacks or coiled breakouts in light of (1) a five-minute trend that was strong as an ox, (2) NYSE TICKs that barely could tick below the zero line, and (3) a VIX that remained in a downtrend on our key chart all day.
And while mirrored days like yesterday and today are indeed rare market anomalies, our job is to simply act based on the data before us, and not get into arguments with the market about whether something makes sense or not. As has often been said, "it is what it is".
One of the Jellie Webinars (still available at a discounted price until 10/31) discusses what I believe are four phases in reversing a backward mindset and, in turn, a losing P&L. The first phase is not believing something and losing by trading what you believe vs. what you see. The second phase is still not believing it, yet simply not trading at all. We'll call this the "stop the bleeding" phase. The third phase is disregarding what you believe and simply trading what you see (long by midday in today's case), and the final phase is doing the same thing, except with conviction and size.
Some traders never make it out of phase one. They spend year after year fighting the market, often taking huge financial and psychological hits during those times when the market acts in a highly unusual manner. And so today's late-day team recap was full of war stories about prior hits we've taken. Fortunately, those days are long gone for the team, and we had the mental dexterity to recognize what was happening and adjusted our plans accordingly.
Some still believe my Q1 run was fiction. Others may incorrectly believe Marco's current run is similarly bogus. How on earth can you be profitable almost all the time? Simple. It's calling paying attention to the market with a sharp, focused mind that's nimble enough to adapt on the fly.
I've often said there's only one thing -- and one thing only -- that will ever prevent me from making money trading. And that's lack of focus ... whether it be due to lack of motivation or burnout (my Q2 & Q3 challenge after the record run), or simple distractions.
Yet right now as I transition back to full-time trader, I'm as focused as ever. The result is performance and an equity curve which are both breaking out of one helluva coiled consolidation ... and hard.
Call it The Emperor's New Groove if you must.
And speaking of Emperor, perhaps I'll indeed dine at Marco's castle in the not too distant future.
Call it The Emperor's New Groove if you must.
And speaking of Emperor, perhaps I'll indeed dine at Marco's castle in the not too distant future.
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