Ugh... What a day!

Today's results:



What an ugly day! I missed the first trade opportunity, which was a good short @ 105 20/32, or even 105 18/32. I decided I'm not going to chase it after it just kept going down. I'll catch it at the retracement. The continuation move was weak and didn't go down very much. It retraced for the 2nd time.

After that, my system gave me a signal to go short again (another continuation move). I took it. (highlighted bar)



It was a fake-out. All the signals were present: momentum and volume were strong on the downside. However, it immediately reversed on me. The only thing I could think of to explain this reversal is that there have been 5 waves downward, and price was bound to go up to take a breather. (But you don't see things like that until after the move is over. Maybe I should be looking at the big picture.)

After I was stopped out, I entered on the long side, given the signals which confirmed the move had reversed. Volume was strong, and momentum was on the upswing (see circles). However, I was stopped out again when a long red bearish engulfing candle appeared, accompanied again by volume and momentum, thus reversing the long signal.

I set myself a daily loss limit of $500.00, and I breached that today. Each trade stopped me out at 4 tics ($31.25/tic), for 2 contracts. Even if I wanted to trade more, I need to respect the boundaries that I set for my trading, because I don't want to get into emotional trading, or worse yet, revenge trading.

I have not had this happen in a long time, and this series of bad trades was all because I entered at the wrong time - right around the time it was about to retrace. The 5-wave move (3 waves in the same direction) is a good clue, plus looking at the bigger picture, like a 15-minute chart helps to keep me in the direction of the larger trend. That last reversal to the short side was good, and I probably would have been able to taper my losses a bit or even gain it all back and then some more. But I need to stay out for the rest of the day, to re-focus and regroup.

That's it for this week. I'll be back again on Monday.

..........

(Note to self: The MBO indicator (TFS system), and the Super Indicator did show divergences at the point when I entered the first trade. Something to think about.)