The day after a big move the markets usually consolidate. There is price exhaustion on the basis the market is stretched a bit too much. The vol can be low and the market can be range bound.
Not today.
After taking profits on low vol overnight they opened the market in the red today. I waited for the market to play out thinking I would sit on the sidelines anticipating a slow range bound day but when my primary edge the cusp trade appeared perfectly on the ES chart at 10.00 a.m. I shorted the market.
Alas, the market did not agree with my trade. After initially selling off for a quick 5 points, the ES bounced off the ONL - overnight low, and we proceeded to rally to 4803, PDH - previous day high stopping me out in the process.
As much as we want to be automatons and robotically place trades when our edge appears we cannot escape our natural human essence of thinking before we make any decision. This is a default mode built in and as much as one tries, one cannot escape it.
My point being: when the market is playing out before you, your mind is bound to come up with a guess with what you think the market is going to do. Somedays you will be correct and think you are a great trader and figured out this game, and some days you will be wrong and feel like shit because you think you made an error and think you still have much to learn about this business.
Neither is true.
The market will do what it wants. You a minuscule participant in this vast technological ocean have no control of what price will do. The market does not even know you exist or where you entered or where you are anticipating taking a profit. All you can do is be disciplined and diligently enter when your edge appears and take the R1 loss when it seems the market does not agree with you. This is all that is needed from you to build a trading career.
The fear, the stories in your head, the searching for the magic indicator or guru - leave that behind. Accept the probabilistic nature of trading: you will lose more percentage wise than have wins but if you trade your system diligently you will be surprised at how well you do. There is not need to analyze everything. Keep it simple.
I have a bunch of new subscribers, welcome and thank you.
If you look at the chart today that I posted above you will see the ES bounced off the ONL - overnight low and then gradually rallied to PDH - previous day high before running into resistance. These levels are super important if you are a futures day trader trading the ES, NQ, YM or RTY. The ES almost always leads and the rest move in tandem. I use the ES chart to trade the NQ.
I describe here in this blog post how I trade and how to draw these price levels on the chart, I would definitely give it a read.