20160412
Short 1 YM 17522, +17
Short 1 TF 1092.3, -1.4
Short 2 TF 1093.8, 1093.8, +1.0, +1.4
Long 1 TF 1091.9, -0.7
Long 2 TF 1092.1, 1092.5, -0.0, -0.1
Long 1 TF 1090.3, -1.5
Long 2 TF 1088.7, 1088.7, +1.0, -0.5
Long 2 YM 17477, 17477, -7, -7
Long 2 TF 1086.8, 1087.1, +1.0, +4.0
Short 1 TF 1101.2, +1.0
Total YM +3
Total TF +5.4
Third day in row where breakouts worked well and were the preferred call to fades.
Friday and Monday were bear breakouts in 2nd trend Inflection Levels, after explosive 1st trends that stretched momentum to limits. ....and me stp'd out badly in Friday's 1st trend trying to find the turn to begin it all. But the 2nd trend breakdowns had very readable inflection levels, and gave a clinic on taking breakouts AFTER the turn was in, instead of fighting the frothing momentum trying to find the turn. So if you want to study breakouts, these last 3 days were good chapters on that subject. Today, the predominant breakout play did not appear at an inflection level, but was more classic Pre-breakout Pause Pattern instead, old school. But whether breakout plays arrive with Inflection Levels or classic patterns, the most important ingredient is the same: a WorkDone technical event accomplished as background to the ensuing 2nd trend trend explosion. These type of technical events base their reversals on exhaustion, a feat that tends to clear the market of all traders holding positions in the opposite direction. Cleaned out, and now attracted to participating in the trend that took them out, they switch hats only to be caught again, fighting the very direction they had intended to partake in the first place. Such is the perversity of the market. But since it's classic and textbook, why not incorporate it in a Trade Plan. The most desirable positions are those that are taken where everyone else is being stp'd out and proven wrong, thus born is the 1st Corollary to the Douglas Premise. Those market psychological concepts are available in the book Pivots, Patterns and Intraday Swings Trades, but in more exhaustive detail in the upcoming book Self Recognition A treatise on mental habit patterns, and a guide to train for and navigate the psychological landscape faced by the active market trader.
