It's true that someone making 2 points every day can become an incredibly profitable trader.  Nobody is doubting that on its initial face value.  If you can make 2 points per day with one contract you're doing fine but if you can make 2 points per day every day with 10 contracts you're making a very substantial income and there's no reason you can't ramp up the position size from there.  In the Emini S&P 500 a trader can regularly trade 20, 50 or even more contracts with ease.

The issue is that when our focus narrows to the outcome of a single day or even the outcome of a single trade it can actually make long-term profitability that much more difficult to achieve.  Let's take a look at why that can be the case.

Not Every Trading Day is the Same

Making just a couple points while day trading Emini S&P 500 futures isn't actually all that difficult.  Often you can pull that kind of profit out in a half hour or less.   The difficulty is in actually keeping it and, more importantly, regularly exceeding it to balance out those days with less than stellar results.

The reality of trading is that every day is different and some days are certainly better than others.  There's plenty of days where you can make a couple of points quickly but there are some that start slow with limited action where it takes a bit more time to find the trades that fit your trading plan or other days where the market enters into a whipsaw period that can cause a loss or two.

While veteran traders who are able to trade the full morning can realistically make profit nearly every day in spite of these conditions there are those who have a more limited trading window or market novices that will have break-even or losing days (though such losses should be kept small thanks to firm limits on overall risk).

Due to this it's important to realize two things.  First, that a trader should generally have a longer term outlook on their trading.  If you focus on "making just 2 points per day" it tends to put a lot of emotional weight into the outcome of every trade.  Suddenly every trade carries more importance and the emotional burden on a trader can significantly increase thanks to just a single trade possibly meaning daily success or failure.  This extra emotion added to the trading process rarely leads to more profitable outcomes.

As traders we must understand that our trading edge needs some time to play out even if our overall trading expectancy is very strong.  The outcome of a single trade or even a single day doesn't determine much.  What matters is following our plan, taking good trades that fit our rules, and letting our edge play out over a larger sample of trades.  This is why I have the day traders in the STA Training Program focus on weekly and monthly results while considering their edge over samples of at least 20 trades.

Second, outlier trading days that offer far more profit potential than the average are essentially the "keys to the castle" when it comes to extreme profitability.  You can still be profitable without them but taking advantage of the one or two days with high potential during the week often means the difference between decent weekly results and exceptional ones.

You can do all right by setting an artificial 2 point limit on your daily profit but some days offer far, far more.  Take Thursday for example, a day that had numerous high quality market swings and plenty of profit potential as you can see in my charts.  If you only came out of a day like that with a tiny 2 point profit you're severely limiting your overall profitability and potential!

Keep Playing When The Deck is Stacked in Your Favor

This is why I will always continue to trade for longer than my normal 2 hours or so on a given day if the market is moving exceedingly well and trading outcomes are highly predictable.  It's not about being greedy or trying to hit some specific dollar figure for the day - it's about taking one good trade after another and continuing to do so if the market is offering the opportunity.

There's plenty of days where I might just trade for an hour to pick up some points and call it a day if the market isn't moving particularly well.  There are times when other activities call me away after only a short period of trading.  However, when the market is moving well, the setups are excellent, and the trading outcomes are consistently in your favor then it's usually best to trade until those conditions change.

Sure, I could have had my 2 points after the first three trades on Thursday and called it a day in about 15 minutes but look at all the potential opportunities I would have missed on a day of exceptional price movement.  Considering it turned out to be the most profitable day of the year so far for myself and many STA traders it's a good thing we didn't pack things in!

If the market is doing its part to put the numbers firmly in your favor then don't let the opportunity pass without taking advantage - strike while the iron is hot!

The post Strike While The Iron is Hot appeared first on Samurai Trading Academy.

Hitting Some Singles and Doubles for Average

Once I finally did latch onto the bigger move down I also didn't really take full advantage of it.  I banked +14 ticks (3.5 points) but I could have had 40 ticks.  I could have taken even more if held on for the entirety of the major swing.  C'est la vie.

It's not an ideal outcome but I don't beat myself up over it.  These bigger moves get away from me from time to time.  The reason why I'm okay with that is because I know that not every day will have those bigger moves.  As a day trader this means I need to "hit for average" with plenty of smaller, regular wins too.  This is crucial to making consistent daily and weekly profits instead of only making money during longer term trends.

I want to make sure that some those smaller but still profitable moves don't eventually turn into losses because I waited too long and the market reversed.  This means locking in some profit when the price action becomes less clear or shows signs of a pullback.  If that requires a tight trailing stop which sometimes gets knocked out then that's the price to be paid.

I still manage to catch some of those huge runs though as regular readers will have seen before in these Emini Day Trading Lesson posts.   The difference is that in those cases the market essentially doesn't give me any choice in the matter because it barely pulls back at all.

Consider Your Trading System

This kind of management isn't going to work for every trading system so it's important to assess the pros and cons of your trade management approach and adapt it within your methodology accordingly.

I personally try to keep my win rate relatively high with a strong reward to risk ratio (above 2:1).  I need to do this while still keeping the ability to adapt to shifting market conditions.  This means taking regular, consistent profits while occasionally getting bigger winners on sudden price runs.

Another trader who focuses solely on trading trends might take lots of small losses to find a good one.  Their win rate may be low but they can still be immensely profitable by keeping their reward to risk ratio very, very large.

Obviously in those cases being knocked out of a trailing trade early could be extremely detrimental to overall expectancy and profitability.  For those traders having more breathing room on a stop would be required.

You Can't Bank Every Possible Tick

As for my own approach, I'm not exactly ecstatic about missing out on the extra profit potential.  That said, I'm also not overly concerned about it.  It will happen with my methodology at times as I protect solid profits already in place. I still know the numbers will work out well in the end over dozens of trades.

I don't need to catch huge waves regularly to be profitable.  In fact, just catching the odd one here and there as an outlier is enough for fantastic results.

The bottom line is that I'm happy with the trading outcome and overall day as long as I traded my plan, managed the trade based on objective market information (rather than emotion) and my trading expectancy remains strongly positive.

Just as there's no use crying over spilled milk, there's no use getting upset about missing a handful of points.  It isn't the first time it's happened nor will it be the last!

The post Emini Day Trading Lessons: +4.5 Points – Locking in Profits appeared first on Samurai Trading Academy.

To the first point, the scarcity of trades has to do with trying to be careful during volatile times.  There's probably a bit of bad luck in there too.

Today in the ES I only managed to catch a couple short trades.  In an ideal world I might have had four or five on the strong run down and eventually a long on the reversal.  Today was just one of those days where I wasn't able to get my fill.  Oh well, it happens.

It's Always Obvious After the Fact

In hindsight it's all very obvious as the bottom fell out of the market.  You pretty much could have shorted anywhere and made a nice profit.  The reality though is that on the far right of the chart during live markets things aren't always so clear.

There was a fair bit of chop and price uncertainty with some key levels in play before things really took off.  I was willing to short into some of that but even with orders in place I just couldn't get a good price where I felt I could keep a tight stop.  In this case that meant I missed out.

Chasing Price

It's tempting to look at a chart like this and feel like you should have been more aggressive and chased price.  Sure, it would work out nicely here but the truth is that there's plenty of times where the algorithms and emotion don't take over this way.  We don't always see stops get tripped aggressively and often price has plenty of pullbacks.

Entering very aggressively would have paid handsomely today.  Most of the time however you are in for plenty of stop-outs without large stops and that bigger risk is something I want to avoid.  As odd as it may sound, I'm happy to miss out on the occasional move like this if it means being a bit safer and profiting more in the long run through improved risk management.

Dealt a Good Hand

Now on to the second point about stringing together numerous wins lately with only a single loss this week.  Let me be clear - this is not typical!  Honestly, I don't even really care because there's nothing special going on here.  It's just the way the cards are coming at the moment.

Part of trading is taking losses and it's going to happen to everyone.  I'm fairly content even losing half the time as I know my average win size far exceeds my average loss so there's still going to be a trading edge there.  Most of the time I do try to aim higher than that with my hit rate (it's dependent on the trading setup type, of course) but the point is that I don't need to string together loads of wins to be profitable.  Even if I do go on a nice streak I know it largely comes down to chance.

Even if a trader wins 90% of the time they are sometimes going to string together a series of losses.  If they are unprepared or taking too much risk per trade then this unlikely but inevitable event could be disastrous to their account.

Similarly, even if I expect I will lose a number of my trades there are going to be times like now where everything seems to come up a winner.  A bit of that can be chalked up to extra patience in this current market or being more careful than usual with setup conditions but some of it is just luck.

Keep to the Path

There's not much point in getting excited about these good runs or allowing over-confidence to seep into your trading approach as things can quickly shift.  If the market is good for one thing it's for teaching lessons to those who don't plan for change.

I'm just going to keep doing what I do whether the next five trades are wins or losses.  I'm just focused on taking one good trade that fits my plan and trading criteria, managing it well, then moving to the next one from there.

The post Emini Day Trading Lessons: +6.75 Points – Missing the Move appeared first on Samurai Trading Academy.

There's no way to exactly predict how each month or season will play out in the markets but there are some common threads.  Yes, the Santa Clause Rally is a thing and we usually see stocks head up into the holidays but not always, as evidenced by last year's big drop.  Then we tend to start a bit slow in January and pick up steam over the spring.  From there when we hit July and August the volume and volatility usually tapers off as there's less big news, fewer earnings reports and less traders at their desks.  I guess they're all off in the Hamptons.

So far this summer, particularly this August, has been a big exception.  News of trade talks with China stalling certainly didn't help matters but as usual with the current regime there has been a number of "factors of uncertainty" in play and it doesn't seem like it's stopping any time soon.  With the Fed under regular assault, Middle East tensions and ongoing trade wars we can probably expect things to remain more volatile than usual in the near future.

Volatility is a good thing for traders in most cases as it usually creates lots of opportunity and excellent reward to risk scenarios but it's a bit of a double-edged sword.  If things become too volatile then it can become harder to control risk effectively and the chances of being effectively "whipsawed" by the market jumping back and forth without really choosing a sustained direction increase. Because of this it's usually best to play things at least somewhat cautiously while volatility remains on an extreme.

The good thing about these conditions though is that it usually leads to fantastic trading opportunity in the relatively near future.  When volume and volatility comes off the extremes it rarely drops to average or low volume and volatility right away.  Things slow gradually and during that period where volatility is no longer extreme yet still above average the number of high quality trades is usually exceptionally high.

I'm happy to play it a bit safe and be very careful of the structure of the market right now but I'm more comfortable doing that because I know my patience will likely pay off.  They might come tomorrow, next week or even a bit farther out than that but as long as I don't chase a wild market and simply pick my spots for now I know there will be even better conditions and trades to come.

The post Emini Day Trading Lessons: +4 Points – Volatility and Whipsaws appeared first on Samurai Trading Academy.

Yes, things are a bit different in May after a relatively slow and quiet April.  It seems the switch has been flipped thanks to plenty of incendiary headlines on trade and the political climate both in the US and abroad.

I often get asked what I change in my Emini S&P 500 (ES) trading when volatility spikes but the answer remains the same – I just stick with the system.  I make small adaptations to take bigger profits when available thanks to the larger swings but I still keep stops small.  This greater reward to risk helps to balance out the increased number of whipsaws we see from volatility and often sees our trading expectancy increase even with a lower win rate.

That’s the thing about my ES trading, I keep it simple and stick with what works.  I don’t make sweeping changes when it’s a difficult week or I take a few losing trades in a row.  I just follow the plan and let the edge play out.

If you’ve done this for as many years as I have though, you do occasionally find yourself looking for a bit of trading excitement.  Just like any profession there are times when you just need to grind things out with hard work and focus but it’s often the periods where you get to be creative and flexible that are the most satisfying.

For me, I find that satisfaction both from the teaching process and from ongoing trading research and development work that includes trading a variety of markets and instruments.  In the periods where I’ve “gone dark” and made few posts on the blog this is always the reason why – I’m exploring new trading ideas and filling that creative need.

One instrument in particular that I’ve traded a great deal in the past couple of years is the Emini NASDAQ 100 (NQ) futures contract.  Although closely related, there’s no doubt that the Emini S&P 500 (ES) and the Emini NASDAQ 100 (NQ) are different animals in their behavior.    They may get to a similar place at the end of the day but the journey there is rarely the same, especially considering the occasionally wild movements of the NQ.

With the ES I take a very structured approach to my day trading system.  It’s a market with huge volume and limit orders are a major driver of movement with many traps and swings meant to capture and fill those orders left in place.  I like to break down the structure and market context, place my orders well in advance for price to come back and fill, then carry on with the price momentum.

Things don’t always work the same way in NQ.  Market orders are what’s really driving things there and big jumps back and forth aren’t uncommon as bulls and bears battle it out.  It’s much more difficult to rely on prior levels or momentum in the NQ as you can’t as easily predict where imbalanced order flow is likely to enter the market.  In the NQ, it’s usually best to wait for a bit more confirmation.

This is why I take a more intuitive approach to trading the NQ with something I call Flow Trading.  This approach has taken a number of forms in the past couple of years because unlike my ES approach I’m willing to be far more creative and essentially treat my NQ trading as “controlled play”.  Trading the NQ in this way fulfills a desire for creative expression and though I don’t trade it with the same size as I would the ES I still find it handles 3-5 contracts easily with minimal slippage.  While I’ve experimented with more contracts than that I still need more time and data to see what the NQ can really handle before slippage becomes a major issue.

I look to read the flows of orders as bulls and bears battle it out, try to identify areas where one side may be able to take overwhelming control to allow for a bigger break (thus better reward to risk potential), then I look to trade using Market orders as price confirms.  Many times this means I’m just waiting with the finger on the button to enter when necessary but more recently I’ve been trading far more often with Buy and Sell Stop Market orders as price breaks in my direction.

There’s nothing particularly special about these charts.  I’ve changed them numerous times in recent months but it doesn’t really matter if I’m using 1 Minute charts, Volume charts or 10 Range Bar charts as I am here.  “It all works or none of it works” as I once heard another trader say.  If you can read the flows then the way you set up your chart doesn’t really matter all that much.

For today’s trading I’m using a chart setup similar to another STA trader who likes to regularly trade the NQ which includes a 200 Period Donchian Channel and a 100 Period Donchian Channel mean line.  I also have my BattleLine set up to act as a guide for trend and overall market strength.

That’s all that stuff is though, just a guide.  Indicators have their uses but they mostly provide context letting you know where you are relative to past action.  I don’t rely on them to predict the future movement, particularly in something like the NQ which can shift its mood at any time.

Instead it’s about reading price and momentum and looking for structures which provide opportunity for an order flow imbalance.  I try to find those areas and structures where if one side exerts control they are likely to do so for a good run.

Part of this is just about practice and getting a feel for how price is reacting (holding edges, churning with no control, over-exerting, etc.) but some traders find order flow tools, Volume Spread Analysis (VSA) or just watching the DOM can help with timing.

The NQ isn't for everyone. I definitely don't think it's a good market for learning how to trade or for picking up the basics of price action. Things just move too fast and are too volatile overall. However, for the more experienced trader that wants to trade in a more intuitive and instinctive manner it can be a great fit. It's a free-flowing and fun instrument to trade and gives endless potential for a trader's creative expression.

The post Creative Expression and Trading the NQ appeared first on Samurai Trading Academy.

In these Journal posts I've been talking about adaptability quite a bit recently and today was a case where the adaptable trader should have taken full advantage.  Swings were large, momentum was high and opening up profit targets to look for more distant areas made sense.

Hitting Singles and Doubles

The problem some traders have is that they look for these home run trades all the time.  You can still be profitable that way, particularly as a long-term position trader, but as a day trader it's going to be difficult to be consistent.

Some days go sideways or have small waves of movement so it's difficult to look for large profit targets.  Some days are more erratic and even if the swings are large they might not be reacting well to known technical levels.  However, if you're getting a day where the market is reacting cleanly and price is clearly making good runs then it's important to be ready to adapt to take full advantage.

There's nothing particularly special about what I'm doing here.  I'm trading with low risk from areas where I expect order flow in my favor, ideally due to a supply and demand imbalance.  Because I'm taking setups in these locations rather than on every pullback in the chart I can generally expect bigger moves to develop and a better reward to risk ratio.

If I get exceptional moves that break the market structure then I'm going to look for exceptional targets, generally either a Fibonacci extension when price is moving into "space" in the chart or a key level.  An example of such a level would be 2887 (take a look on your daily chart to see why) which I used for trades and targets all session.

Not About Catching Every Tick

I didn't really maximise my results either but it doesn't matter to me.  I could have had more points in both of the major runs down but I simply followed my plan.  I'm not going to worry much about missing out on a point or two as I know how often those areas can snap back and take that profit away.  After all, it's only a theoretical profit until it's realised by exiting the trade.

So while I do want to take a good chunk of each move if it's available I'm never really going to worry about taking every tick.  It's better to be profitable than perfect.

That's a good lesson for all the Holy Grail seekers and system hoppers out there but the truth is that it's a continual lesson for me as well.  I tell myself regularly that it's better to be profitable than perfect so I don't lead myself astray.

It's natural to want to find a way to take points from every move and never miss an opportunity but that's not the reality of trading.  Instead, I just focus on the setups that fit my plan and known trading edge, adapt my management to the market, and let the numbers play out.  It might be a bit less exciting than catching a move perfectly but it's also considerably more effective.

The post Emini Day Trading Lessons: +5.25 Points – It’s Not About Taking Every Tick appeared first on Samurai Trading Academy.

By itself a losing day isn't necessarily anything to get upset about.  You can trade exceptionally well and do everything according to your plan and some days the cards just don't go your way.  That's all part of operating on probabilities and even trading strategies that win 90%+ of the time can string a few losses together.

The thing to keep in mind however is that if you know your edge is strong and will continue to play out in the future then there's nothing wrong with that single day's outcome.  That's why I evaluate my performance based on if I followed my trading plan and how well I managed my trades rather than the end result.  I know if I focus on the process then the results are inevitable, even if they might be elusive for a day.

A Look at the Process

While I did trade a bit more aggressively today than usual I can look back on this chart and I know that I took good trades.  I'm happy with my trading performance because I stuck to my plan.  But how can I say I'm fine with the result when I took three losses?

It's because I consider a trade to be a good one as long as it fits my rules and I manage the trade well.  If I take good trades over and over then that means I performed well even if the numbers don't show it on this small of a sample size.

All three of these trades would have a good expectancy if taken 50+ times and that's what matters in the end.  A good trade can result in a win or a loss but what makes it good is that it will pay you far more than it takes away over time.

What I will admit is that the first two trades were a bit riskier and lower expectancy overall due to the market being largely sideways and because of the supply they were testing.  I knew those risks before going in which usually means I will just manage the trades a bit more tightly.

In most cases that means taking smaller wins or losses off the table if things don't follow through but I didn't get much of a chance to manage the first long.  Not a big deal - it happens.

Calling It a Day

This kind of outcome for a trading day doesn't happen to me often but if things aren't going my way it's important to know when to call it quits.  In my case that's either when I'm down ~4 points or if I end up taking a few losses in a row like today.  Having this kind of firm rule in place is absolutely crucial to long-term trading survival.

To use the poker term, it keeps a trader from going "on tilt" as they become more emotional from taking losses and then throw their rules out the window.  This usually leads to a rush of revenge trading or a complete lack of risk control with a emotional downward spiral and loss of equity as the likely result.

Even if you're not particularly emotional about your trades or have learnt to control them from years in the markets, there's still a good reason to wrap things up if you take more than just a loss or two.

If a competent trader is stringing together losses it often has less to do with the individual or their plan and more to do with the type of market environment they're in.  Sometimes the market just enters a phase where it moves erratically in whipsaws and other times it doesn't respect normal technical levels.  If that's happening then it's usually best to call it a day and come back tomorrow both mentally refreshed and with a new market environment to work with.

It doesn't really matter to me at this stage if the market has some fantastic moves in the afternoon and I miss out.  I'm done for the day.  Period.  I have a plan in place and I follow it every single day.

That's why I've been doing this for a long time and why I'll still be around years from now.  And if I'm thinking that far out, why do I really care about the outcome of a single day?

The post Emini Day Trading Lessons: -3 Points – It’s Okay to Take a Loss! appeared first on Samurai Trading Academy.

The Emini S&P 500 is constantly shifting from trends, ranges, consolidation, swings and everything in between so if you can't adapt you're not likely to achieve the kind of consistency and profitability you're looking for.

Don't Fight the Flow

For example, it's not unusual for me to see novice traders that I've worked with do essentially the exact opposite of what they should in terms of trade management when they first start out.

When the market is moving with little momentum or in a tight range they often enter trades hoping for the home run breakout move while leaving the stop wide open.

When the market is moving well and there's a strong trend they have an opposite reaction where they fear the move may be coming to an end and either look to take small profits or bring their stops in too tight, often resulting in a near break-even stop-out.

It doesn't make a lot of sense in hindsight but at the time these emotions of fear and greed are real and exert a significant influence on many inexperienced traders.  It's vital to learn how to flip this behavior by giving strong price moves time and breathing room for continuation or by tightening things up and even taking smaller profits when the market momentum is limited.

This allows a trader to essentially trade within the "flow" of the market rather than fighting against it and ultimately leads to more consistency and profitability as a result.

Seeing the Big Picture

It's worth noting that this doesn't mean a trader is always expected to adapt perfectly and to take full advantage of every move.  Sometimes you will look for a bigger profit in a trend and end up giving part of it back that you could have banked.  Other times it might mean that you take a small profit in a tight range and and then the breakout move suddenly develops without you.

The important thing is to not let those single instances create an emotional response the next time you see that same trading setup develop.  You need to think in terms of large samples of similar trades.

If you aimed for larger profit targets after a strong trending move on 50 or 100 similar trades, would you be more profitable overall?  If you tightened up your stop a tick or two (or even took profit off the table) when the market was consolidating and you aren't getting the next leg of the move you're looking for, would your trade expectancy in those situations improve?

Those are the kind of questions a trader needs to continuously ask while regularly collecting data and insight from past trades, practice sessions and their own journal sessions.  This requires a bit of hard work but not only will it give a trader full confidence in their trading edge but it will also provide them the ability to be adaptable as the market condition shifts.

It usually doesn't take a whole lot of number crunching to see how often we get in our own way when it comes to trade management and that it's often far, far easier to simply adapt and go with the flow of the market.

The post Emini Day Trading Lessons: +6.5 Points – The Importance of Adaptability appeared first on Samurai Trading Academy.

In extreme cases, the reality check doesn't occur until what should be a small loss spirals into something massive and possibly account-destroying simply because the trader held to their bias while throwing reason out the window.

A One-Way Train?

It's days like today where it's easy to be convinced that the market can only go one way and that's to the upside.  We are breaking into new all-time highs, a couple of trading days in a row have closed near the daily high, and even the pre-market gave us a nice run up before the NYSE Open.

In the long-term you're probably going to be right to have a strong bullish bias but as a day trader that biased approach would have likely meant taking losses on longs, missing out on quality shorts and effectively fighting the morning flows despite the price information available.

However, if a trader is open to anything being possible in the market at any time and is willing to be adaptable if the situation demands it then they likely took advantage even as price didn't cover a lot of ground.

Keeping an Open Mind

This isn't to say that there is no place for planning in advance and detailing the scenarios that are most likely to play out over the day.  There's value in having a strategy in terms of how you want to trade and anticipating in advance how the market might react at key areas.

That said, a trader needs to be prepared to change their mind and work with the new price information as it becomes available.

As the saying goes, the market is always right.  Or if you prefer, price is king.  What they say goes and it doesn't really matter what you think or how strongly you believe your specific scenario will play out.  They just do what they do whether you're along for the ride or not.

The post Emini Day Trading Lessons: +6.75 – Be Careful About Your Market Bias appeared first on Samurai Trading Academy.

Still, there was some good trading and it was certainly a bit more lively than yesterday's very quiet morning.  For the most part today was just about taking advantage of momentum swings.  Not every day is quite so straight-forward but it's nice to have a day like this where you can just keep things simple and pull out some easy points.

Developing Trader Intuition

Aside from simply sharing charts and discussing the trading process I've also thought this journal could be a good place to touch on a few other things related to the trading world that are sometimes on my mind as well.  I've spent a lot of time recently thinking about the concept of "intuitive trading" and that's at least a part of what this trading journal is about for me.

Charles Faulkner, a practitioner of Neuro-Linguistic Programming (NLP) and also a trader, thinks that keeping a trading journal and documenting thoughts, feelings, ideas and insights throughout the day is a crucial part of the process to developing natural, intuitive trading skill.

As he says, prediction in hindsight is a common cognitive illusion so unless you're really documenting things at the time to see where your "leaps" in thinking take you then you're not always going to take the right lessons from your trading actions and results.

In addition to this journal that essentially wraps up my trading day with a few moments of reflection I have also kept a log over the years with notes on my internal thought-process, any emotional responses throughout the day (particularly when managing trades) and other elements or possible insights that have affected my trading process.

I think doing this over time has improved my market edge and allows me to exploit certain market opportunities I might have missed out on years ago.

For example, you'll occasionally see trades on my charts that are marked as being Non-STA or NSTA.  These are typically trades that don't fit my core Samurai methodology (which are the more common and highly repeatable setups that make up the bulk of my trading) but are instead trades that are more contextual or intuitive in nature.

I'm often hesitant to share some of these charts and trades as I know they can be difficult for others to replicate, at least initially.  However, given enough screen time to develop pattern recognition and to build confidence in their trading skills I do believe it's possible for most people to trade in an intuitive manner successfully.

Best of Both Worlds

That said, I still find that works best for me is a combination of approaches.  I prefer to keep the majority of my trades and the foundation of my edge in something that is easy to repeat, fairly simple to apply, and can have a very structured plan around it (which is what I teach as well).  I want to be able to identify my setups well in advance of when they will happen and plan out my stops and possible profit targets before I put a dollar at risk.

With more intuitive trading that isn't always possible as there's something impulsive to it and it requires acknowledging feelings or cues that we don't always fully understand at the time.  It's still critical to set limits on your risk and to make sure those trades fit within the structure of the rest of your trading plan, but sometimes it's important to know when to give yourself a bit of wiggle room to take advantage of what the market has on offer.

As Ed Seykota said when talking about his key trading rules in Market Wizards, "follow the rules without question... and know when to break the rules".  I think he just might be on to something.  Perhaps that could be worth exploring a bit further in future Journals.

The post Emini Day Trading Lessons: +6.75 – Thoughts on Trader Intuition appeared first on Samurai Trading Academy.