Core PCE definitely gave us some much-needed volume today, it’s too bad my entry into the market was a bit too early even though my thesis of the price action was eventually correct.
Fed's preferred inflation gauge came in with the lowest annual rise since March 2021 this morning. This made the market immediately go up seeing inflation numbers contracting thus betting a rate cut is in the cards.
I was looking to go long the market thinking the pre-market rally would continue into the session. I waited until the 10 a.m. Pending Home Sales data drop when that came in much lower than expected the market sold off to the PDH zone. Here I thought we would get a bounce and the rally would continue so I went long at the PDH. The trade went in my favor for a little bit before selling off and taking me out for a R1 red day before bouncing off close to the PDL and rallying 45 points in the ES which I missed.
After taking a R1 loss for the day I am very cautious of entering the market unless it is an A+++ trade. This has worked well for me keeping me in the game for a long time. Sure there have been days in the past where I have lost my head, but those days are far behind now. Risk management is the foundation of my trading. How much you lose when you are wrong will either make you break you as far as your trading career is concerned.
Like I’ve said many times we cannot control the market. It does what it does. There are bots, algorithms, massive hedge funds and large traders deploying big orders into the market, us as small retail traders all we have to do is carefully enter the market when our edge appears and let the market play out. There is no room for fear, doubt, anger, frustration. Basically you cannot predict the market, why get all worked up over it? Besides once you start trading you are not trading money, you are trading numbers, that is it. The money that is coming in or leaving your account has no real value in the real world unless you wire it out to your bank, all it is, is a score.
So play the game with discipline and try and win as much as possible. Try and maintain a good score. Your opponents are big professional players and you are starting at a disadvantage, but with the years of experience you put in without blowing yourself up, you can have a fruitful trading career.
We’ve got more econ data drop tomorrow.