Trade Summary
20121220
Short 2 TF 845.5, 845.3, -0.5, +0.5
Short 3 NQ 2690.5, 2691.5, 2691.75, +.25, +2.0, -0.25
Short 2 TF 848.1, 848.3, +0.5, +1.0
Long 1 TF 846.0, +1.5
Short 1 TF 848.6, +1.0
Total NQ +2.0
Total TF +4.0
Today's NQ short trade, at around 10:12am ET, deserves some examination, as the failure to capture the subsequent gains as price declined was not from a really poor entry price level, but handling of the stp-loss orders. The first unit was taken perhaps a bit early, and as the topping pattern developed, it was apparent that fill was at the bottom of that pause/reversal pattern. I exited that and re entered it just a bit higher, so as to still be working the plan with 2 units. The goal of our trading is to exit half the order at a minimum profit (+2, in the case of the NQ, +0.5 o/b in the TF), in order to 'pay' for the trade with a net break/even stp-loss on the remaining unit. In this case, we were able to exit that 'repositioned' 2nd unit at +2.0. And once out of the 1st unit, the stp-loss was moved to -2.0 for the remaining unit, which is the net b/e for the pair we seek. The next repositioning of that remaining stp-loss to about its own entry level should only come after the pattern has had a further break away from the pattern. Today, I moved that stp-loss on the last unit before that further break down occurred, and, as might have been expected, I got stp-out of it as the pattern continued to form, just prior to a more final breakdown that nearly took the NQ to a new Low-of-Day, and at least a decent 10pt profit. I was already at a net b/e for the pair, why move the stop on the remainder so soon when it violated a rule I have in my trade plan?
I can point to lots of little excuses that rule one's behavior at those moments. Loss of patience, avoidance of further frustration, reappraisal of the market's trend due to price action, assumptions as to where price was trying to go, etc. All or any of those were probably contributing. But that's what a trade plan is for. It's meant to supplant the 'thinking' and instead, create a guideline for behavior that lies outside of such market appraisals. Trade the plan. Be content that if the trade plan rules are valid, and you still get stop'd out, you traded the plan, and those same rules, if followed consistently, will produce far better results in the days ahead than outguessing their validity from trade to trade, from appraisal to appraisal.
