20191105
Short 1 RTY 1606.0, +3.0
Long 1 RTY 1603.4, +2.0
Short 1 NQ 8226.25, -2.25
Short 1 NQ 8233.5, +11.5
Long 1 RTY 1606.2, -0.0
Long 1 RTY 1603.4, +2.0
Total NQ +9.25
Total RTY +7.0
Fading a news release that spikes into an exhaustion signals is old stuff to an old timer, like me. I've been doing it for 40 years, and in my earliest days, watched floor traders in the S&P and Swiss Franc pits eat such supposedly significant news releases like it was so much breakfast food. Newer traders like to see the news, like to know the expectations, like to wait til the actual economic report is published on their favorite online econ news site. Too late. It's over by then. I only bother with one aspect: Knowing what time the econ report is scheduled. Thereafter, its all in the charts. If a buy or sell signal that is comprised from the three main, disparate technical elements key to any Trade Entry Model appear some 5 to 10 minutes at least before the news. I pre-position for it. If price fails to give me enough cushion by the time the scheduled release is at hand, I dump it. "No cushion, no keep" is a phrase I often type into the chat room in such positions. A cushion can also come from exiting a part of a multi-contract position. But it's amazing how such signals often presage the actual direction of the news. Like it just 'knows'.... But of course, it doesn't. No matter how many times you hear it otherwise said in chat rooms to the contrary, the news is just not leaked to a sufficient size of market participants to actually move the markets.
Today, when the 10am ET econ reports came out, the response was immediately positive. I made the call to short the NQ IF the news was positive, not afterwards because the news somehow was insufficiently positive to maintain some bull advance. After that, it was simply getting the technical aspect of that news spike to appear. (One was a Serial Sequent fractal algo number, which only appeared in tne NQ because it was the only one set to do so). And the other was the take-out of a Y-High marked clearly on the Pivot-Exhaustion Grid for the NT Day-0nly contract.
I got in the first contract attempting to fade this news too soon, because I thought it was toast. So had to re-enter higher up after it actually accomplished that Grid take-out number. I got anxious about missing the trade... I do that... I suffer for it a bit. But I seldom suffer for my stp-outs. I don't use big stops, and consider a stp-out as simply part of the game. But I do suffer for early exits. And far worse than being stp'd out was the stupidity I felt for taking only 11 points profit for that NQ short in what turned out to be a 40 point excursion... duh.
I get in too early, I get out too early, I get out too late, I get in too often. In short, I make all the mistakes any trader makes, and I make them everyday. ...and yet, on most trading days (excluding a couple last week), I get a reasonable 1st Frame trading goal.
Trading is not a predictive process. It's an 'if this, then that' decision tree. Be ready for the signals when they appear. Act on them without hesitation.....or patiently await the signal's full fruition. Those signals appear quickly, and seldom last long. Trade from signal confirmation instead of price confirmation. That will separate you from the crowd, and allow you to use smaller stops. cya manana....
