20180423
Long 1 ES 2673.0, -1.25
Long 2 NQ 6681.0, 6681.0, +5.0, -1.0
Long 2 NQ 6677.0, 6677.0, -2.25, -2.25
Long 3 NQ 6676.5, 6676.5, 6676.5, -2.25, -2.25, -2.25
Long 2 RTY 1563.3, 1563.3, -1.1, -1.1
Long 2 NQ 6662.75, 6662.75, -2.25, -2.25
Long 3 RTY 1562.3, 1562.3, 1562.5, +3.0, +3.0, +3.6
Long 3 NQ 6660.25, 6660.25, 6662.5, +10.0, +10.0, +12.0
Total ES -1.25
Total NQ +20.25
Total RTY +7.4
That the 2nd trend of the 1st Frame is more likely to be true and the 1st trend false is an observation every floor trader makes early on in his career. Just do the statistics: nearly 80% of all trading day models are of the Test-n-Reject variety, and only 20% or so each month are Persistent Trend. (see the book Pivots, Patterns and Intraday Swings for examples. Or as my mentor was fond of saying "if it goes up fast, it seldom lasts". The problem is, how to judge when this first trend is over and ripe to be faded. Even with all the displays of irrational volatility seen in recent days, it was still a surprise to me that the NQ, the RTY and even the YM would eventually make it all the way down to the ETH lows before this ripeness would finally set in. And yet I threw some good money at this first trend too early because I couldn't believe it would actually arrive there. Chart your highs and lows. Know the market came from in both directions in over-night trading. Be prepared to take these levels into consideration as your possible trade entry levels for the frame.
And I can hear the usual refrain from chat room rookies complaining about this action. "They knew where my stops were and they came and got me. The market is rigged." Nonsense. Nobody knows where your stops are. EVERYBODY KNOWS WHERE THE STOPS ARE. All you have to do is look at a chart of all-session highs and lows to know that. Thus the Douglas Corollary: "....most of the money to be made in the markets is made at the places where most traders are being stopped out and proven wrong." For the complete Douglas Premise and its two corollaries, see the book True Self, available on Amazon.com for a few dollars in Kindle format.
