Wednesday, June 23, 2010

Strange days

Today was a very strange trading day. The PPT are really getting their act together and will not let the tape go where it seems to want to go. If you were trading or watching the action you saw how fast things moved to the downside when they did go. Then the move petered out and rose on a no volume candle and drifted upwards. The downward moves show me where the power is but these days you must remember there are forces that I believe are stopping it from finding its level.
Throughout my trading career I have never traded on news or tips or have expectations. My current feeling that the market is like an drunken, blindfolded elephant balancing on a 10ft. pole is due to the underlying conditions.
I trade on the candles, momentum and gut feeling. these have served me well for eight years through up, down and sideways markets. Today however I got the feeling that my edge is being marginalized by the unnatural forces propping up the markets. Things are not following through as they have done 1000s of times before.
I am always more than happy to follow the manipulators in either direction but the tape action today was ultra difficult. No big losers, no big winners but just a lot to starts and stops. Scalping mode was about the only technique that paid off today but that gets tedious pretty quickly.
Hopefully the action will show itself a bit more direction up or down in the coming days. Until then I will be playing the pops and pullbacks more aggressively to get a jump on the micro trends available. Or maybe just take a holiday and wait it out.

3 comments:

Blue said...

Today was a FED day, so pretty much dead market until 2:15eastern. Even this year FED days have been nearly uneventful compared to the past. I was watching TNA and waited for the fake move to finish and was too chicken to pull the trigger long at 43.20 (prior support line on my chart). Sure enough straight up for 6 minutes +1.80 then straight back down to 43.21.

It moves pretty fast. I don't know how anyone can trade and make money without profit stops. I also don't know how anyone can use stop losses and not get constantly shaken out before the trade works. Especially trading the ETFs. So many shake outs!

I use two simple indicators for entering and exiting trades for timing, and they've been useless for most of this year. All I've come up with is some gut based trading and if the timing isn't spot on it's a losing trade. The majority of the time my trade will make .25 then dump .50. There's absolutely no consistency to my system so I've stood aside.

Anonymous said...

the GS Bean Counters wanna take us to a ride :)

Scott said...

blue- well there you go, i didn't know it was a fed day but anyway in the past i trade fed days like any other day.
eu max- ha!