What you may notice from today's trading results on the ES and NQ are two things. First, that I'm still not trading all that often considering the market movement. Second, that despite that I've managed to string a nice series of wins together so far this week.
To the first point, the scarcity of trades has to do with trying to be careful during volatile times but there's also a bit of bad luck in there too. Today in the ES I only managed to catch a couple short trades but in an ideal world I might have had four or five on the nice run down and then 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.
In hindsight it's all very obvious as the bottom fell out of the market and you pretty much could have shorted anywhere and made a nice profit. The reality on the far right of the chart in live markets though is that things aren't always so clear.
We had a fair bit of chop, some price uncertainty and some key levels in play before things really took off. I was willing to short into some of that but I just couldn't find a good price where I felt I could keep a tight stop so in this case I missed out.
It's tempting to look at a chart like this and feel like you should have been more aggressive and chased price a bit. Sure, it would work out nicely here but the truth is there's plenty of times where the algos don't take over this way or stops don't get tripped as aggressively and price has plenty of pullbacks.
Entering very aggressively would have paid handsomely today but most of the time you are in for plenty of stop-outs without large stops and that's 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.
Now on to the second point about stringing together a series of wins lately and having only a single loss so far in the whole 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 far exceeds my average loss so there's still going to be an edge there. Most of the time I do try to aim a little higher 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 and even if I do 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 that unlikely but expected event can be disastrous.
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 perhaps being more careful than usual with setup conditions and trade selection but some of it is just luck.
There's not much point in getting excited about it 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 expect or 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.
Latest posts by Cody Hind (see all)
- Emini Day Trading Lessons: +4.5 Points – Locking in Profits - August 27, 2019
- Emini Day Trading Lessons: +6.75 Points – Missing the Move - August 22, 2019
- Emini Day Trading Lessons: +4 Points – Volatility and Whipsaws - August 20, 2019