Monday’s Trading

I didn’t take any trades today. I woke up about an hour after the markets opened, and looked at the narrow range, and checked in with the eotpro folks, and said “nah.”

I am still exhausted from my trip to NYC. It was a lot of fun, but I only just got back at 1 AM today and I got very little sleep during the trip to start with. So, I have been more-or-less a vegetable today, and of course I’ve been trying to get my cats to forgive me for leaving them. :-)

Anyway, today’s lesson is one of my old favorites… Keep Swinging! Check out the chart for the afternoon. There are three potential trades on it according to my signals.

Let’s say I traded with 2 contracts. I would definitely have taken the first trade. We had a signal and we were at least riding along Alla’s Average, if not quite trending with it. I would have bailed when Bonnie’s Bars turned red, for a 1.5 point loss per contract. It had come within 1 tick of my first profit target, but didn’t get there. So, on two contracts I’d be down a total of 3 points.

Then the second signal comes. I would not take this signal, since price is chopping through Alla’s Average. But, if I did take it for some reason, I’d take one contract off at the first math line, and bail on the rest to bring the total trade to break-even. After I take a partial profit, I don’t like to let the overall trade become a loser. So, whether I took the trade or not, it wouldn’t affect todays bottom line.

Pretty depressing, no? We have to wait for freaking ever between trades, and they have been disappointments. Check out the rank sum histogram showing WIDE stretches of statistical indecision in the trend, too. Well, at least at this point the math lines are still about 2 points apart. So, the risk:reward on many trades still wouldn’t be too bad. Therefore, keep swinging!

The third trade makes the afternoon. It wasn’t my favorite looking action, but it was coming down from a double-top, and did poke through Alla’s Average, tap it, and then fall again. I’d wait for it to make a new low at 1400.25 to get in. So, you get in with 2 contracts, and bail on 1 for 2 points of profit, and the other for 4 points of profit. That’s a total of 6 points, giving you a net profit of 3 points for the afternoon.

$150 isn’t great for three hours of work, but the action was really sucky today, and I’m proud that we came out ahead in a pretty easy and methodical fashion. I’m still brainstorming ways to code “trending against alla’s average” so that my entry will pretty much be entirely mechanical. But, so far, no dice. It’s a complicated concept to turn into an algorithm, in my opinion.