I didn’t take a trade on Monday or Tuesday, took one today which finished with a little over R1 in the black in the NQ. In retrospect I should’ve taken the trades when my Edge appeared in the past two days and I only have myself to blame.
FOMC or FED day is probably the biggest news day in the market for traders. This week I was looking forward to Wednesday - today, as the event that would give us a major market move. Since Monday and Tuesday had almost zero headline data I decided that I should sit it out and wait for the action on Wednesday. This was a mistake and I don’t want you to make the same mistakes I made dear reader.
One of my core beliefs about trading is this:
You have to take your Edge when it appears. This is the only way you will make money in this business.
Your Edge is the fat slow pitch over the plate - sorry for the baseball parlance for those that don’t know the game. You have to swing at it. The probability you will get a hit, a double or a home run is high, whereas if you swing at a pitch that is coming for your chin more than likely you will miss or worse take one on the face.
The trading Edge is the same way. It is the high probability signal that you will make money whereas being hesitant to take the Edge and chasing the market and taking a random trade is a high probability loser. Even if that trade wins, you will lose in the long term because you will continue to take random trades.
This is the importance of having an Edge and executing your Edge whenever it appears. This is your only opportunity to make money, you cannot pass on it. And worse having passed on it by fear, doubt, hesitation, you get FOMO and end up taking a bad trade, outside of your setup. This is a killer and will keep you at the same level as a trader not graduating to the next level.
About today: Powell was as usual “data dependent” about his projections of the future in his statement about the anticipated rate cuts coming in 2024. But nine of the Fed's 19 policymakers see 3 quarter point rate cuts this year, and nine see 2 or less. Only one penciled in more cuts than the median, compared with five in December. This made the market catch a bid and the first instance of a pull back in the ES I entered the market.
I hope you the reader have been trading well and learning a little bit from my newsletter.
We have some more data tomorrow on tap.