Wednesday, November 11, 2009

Wednesday Notes - Smelling Blood

Those who have looked over my shoulder over the years know I trade best when focused, motivated, and -- frankly pi$$ed off.

And such was the case one time last week when the team saw me get downright mad at sub-optimizing a sequence, after which I took it out of the market in such a way where ... well, suffice it to say that you didn't want to be on the other side of my trades.

For I smelled the blood on a consolidation break where longs were stuck in losing positions, and I proceeded to hammer away at the market by shorting every uptick in sight on a major downtrend, often adding to my position at times to create one of those outlier weekly trades that brings home the bacon.

One of the key aspects I drilled into the Jellie teams this year is to remember that every time they enter a position and are correct on the current market bias (which should be the vast majority of the time), they're putting the trader(s) on the other side of the trade in a losing position, who will have to act which will further move the market in their direction.

And the more we're right, and -- as we get better and armed with more capital -- the more size we establish, the more the "other guy's" resulting actions will provide us with profit.

Ever catch yourself "lolly gagging" into a trade without emotion based on some stupid pattern in some stupid book? Do you view charts as patterns and not people who have previously acted or have to act? Do you not trade thinking about the trader on the other side of your trade?

If so, you'll likely be spinning your wheels forever as you fail to "get" what trading is all about.

You have to make it personal.

You have to smell blood.

In the words of Rocky's coach, the "market" isn't a machine ... it's a man.