<What do you do to formulate your trading hypothesis for the day?>
Actually, that is funny in a way. These days the best trade is usually to short the early rally, take a few points, and bail out. Damn, if you think about it, selling only 4 contracts for a point each morning and taking the rest of the day off makes you a thousand every time you can pull it off.
But of course it's not usually that easy. As undisciplined as I am (ask my accountant), each day I print out an intraday chart of the day's action, noting where important turns were. I also note where various indicators hit intraday extremes and write that on the page. This page is filed in a 3-ring binder. I file the page according to patterns I find to be easily identifiable.
I cannot explain to you what is and what is not an "easily identifiable" pattern. It has to be viewed visually.
So anyway, todays' pattern fits in with a pattern that "should" start high, move lower into lunch, and rebound somewhat in the afternoon. Looking at patterns like that in the recent past, I get a "feel" for what to expect. There are more "pattern-watchers" out there that even I first thought. E-Wavers look for patterns, Fib people, and so on....each just looks for them in their own way.
For my own part, when I start mixing and matching the various approaches to pattern recognition I get paralyzed if one does not "agree" with another. So I stick to the one I know best.
Once I have an idea how the pattern should unfold I make my plan. My plan today was to go short at 8:45 CT if everything lined up okay. PREM was not trending higher, for example. Other stuff as well.
So I did just that....Grabbed 3 points on 5 contracts so far and I have 2 others I'm holding looking for more. Now, the gamble is should I be looking for more? Of course, who cares because I can just put in a buy-stop at the entry point and I'll get out of those 2 flat.
I'm still in, because patterns like today can be very wild. I'm taking a risk but not much because I already have a profit and so what if I don't get anything out of the last 2.
I suppose this post is not too clear, I'm sorry. I'm watching what I'm posting on my left, I'm watching Parabolic stops on my right, I'm watching ticks in front of me, my fax machine is ringing and my wife is calling me to lunch...chicken parmesan, a favorite. So I cannot keep my thoughts in order.
Anyway, bonds just went lower. I think I may have a winner here.
I tried to present the general idea....I'm just a bit distracted. |
