Thursday, May 24, 2012

Thursday Evening

The bulls stepped up in the last hour again and closed the S&P futures at about 1323. 1326ish is the high from Tuesday, and the 20day WMA is about 1331. Today was pretty choppy, but the bulls held the 1308ish level again. That level was tested 2 times in the night session and once during the day session today. S&P, Dow, and Russell futures closed on their highs of the day ... but the Naz futures lagged.

Thursday afternoon


Mechanically, trading is not hard :
  1. See trade
  2. Take trade
  3. Set stop and (optionally) target
  4. Tighten stop if appropriate
  5. If stop or target not hit, go to 4

Psychologically, however, trading (can be) very difficult and stressful.  Why is that, when the activity is relatively simple ?

Fear.  Just plain old garden variety fear.

Fear of losing money.
Fear of giving back money.
Fear of something bad happening.
Fear of being wrong.
Fear of failure.
etc.

I struggle with fear every bloomin’ day.  It causes me to miss good trades and to exit good trades too early.  I am making some progress on it, but not nearly quick enough to suit me.  For me, the best antidote to fear is concentrating on steps 4 and 5 above.  In other words, I’m trying to focus on the process, not the outcome.

Maybe I need this tattooed on my mouse hand :
Just move the stop, dumbass.

The best traders have learned not to be fearful.  They have confidence in their methods and know that they will make money over time.  Not necessarily today or tomorrow, but in total.

One of the best books I know to see how great traders do it is
Market Wizards: Interviews with Top Traders by Jack D. Schwager (which I will read again soon, and again and again until it finally sinks in, lol)

“Named must your fear be before banish it you can.” -- Yoda

Thursday Morning

Gator's Chart of the Day: FIRE
I'm taking another look at this internet/cloud security software vendor.  I've traded it before and I like the company and the industry.

The stock spent most of March and all of April in a volatility squeeze which resolved with a breakout.  It has since made a slow pullback to test the breakout and is now moving higher again with the 20 day sma as support. 

I had hoped for a tag of the 50 day sma to re-enter the trade but it didn't happen.  Now I'll probably take a small starter (1/4 of eventual size) and build if it continues to move higher..