Great vol in the markets today.
The CPI came in much hotter than anticipated pre-market and the market quickly sold off with the understanding that inflation might not be under control and the FED is probably not going to start cutting rates anytime soon.
But for reasons unknown the market started catching a bid soon after and they drove the ES right up to PDH - previous day high. When the market retraced to form my edge I took the trade. But I was obviously positioned the wrong way. And soon I got stopped out.
I got in a little bit too early today. I was anticipating massive vol due to the CPI miss, but once the market opened I didn’t take into account the econ data and purely traded my signal. Once the market got away from me it was hard for me to get in, not really liking what I was seeing on the charts.
Taking a loss early in the day can do this to a trader. The mind becomes cautious and you don’t want to rush into a half-baked trade. This was my experience today.
For the astute trader who had the patience to let the market play out today, you must’ve done well. For those of us that largely missed the action, all we can do is recalibrate and come back ready for another session.
Like I often say on here, for discretionary traders it is our thoughts that controls our trading. Once the trade is live how much non-attachment we have for our position depends on the trader’s experience and his acceptance of the process of trading.
If a trader was completely calm as his position zigzaged on the chart giving up his profits and took the R1 loss and waited patiently for their A+ signal to appear again and took that trade without hesitation or doubt that trader would well be on their way to having a formidable trading career.
But for most traders this is where they get stuck. The fear and uncomfortable feelings in the face of an open position in the market makes a trader do crazy things to protect themselves and their capital. The memory of the losses in the past come back to sting the trader and they try and avoid this feeling by cutting profits short and moving stops to not take a loss. This inadvertently hurts the trader even more.
I have posted this screen shot below before, let me do it again today.