Stupendous Friday rally to close out the week. Where have we seen this before?
LOL.
That’s how I started my last Friday’s TDR. And I’m doing that again today.
For some reason markets love to rally on Friday’s. I have seen this happen countless number of times in my career now. I have caught a few and missed out on a few but I managed to catch most of that rally today.
Again, premarket I was surprised to see the ES suddenly shoot up at 8.30 a.m. On perusing the news it was inflation data that did it. The data after modest revisions to 2023 inflation figures supported assumptions that the Federal Reserve will cut interest rates this year.
I wasn’t expecting this data and that’s trading for you, expect the unexpected and always know you will never have this bull by the horns, it will always throw you a surprise and you better not be leveraged the wrong way.
After the open because of the pre-market action and the data I was looking to go long, it being Friday and all. When the ES dipped down to PDH - previous day high and bounced off it, I took the long and let it ride to my profit target of R2.25 for the day in the NQ.
Everyone of my TDR’s I like to reinforce one facet of trading that needs to be remembered. Today it is the unexpected nature of the market, which makes trading difficult but also fascinating. The market does things that us traders cannot imagine or believe - that’s where the big losses come from. Not accepting the fact that you have no control over price or have powers of prediction but only a duty to trade with a system that takes small R1 losses.
The market will almost never do things that you expect or predict it to. Even if it does it will first go the other direction before it goes in the direction you originally thought it would. And before you know it, you have thrown your original thesis out the window and have taken a loss and watch the market leave you behind and go on a massive one directional move. This has happened to all of us, this a feature of trading and not a bug. Accept it and move on.
You cannot predict the market and you cannot control price, the only thing you can do is enter when your edge appears and make sure you are not trading too big of a size. The rest is up to the market to take you to your profit target or take you out for a loss.
Emotions cannot be involved. All it is, is a game of probabilities. Something to think about and work on this weekend.