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 February 3, 2004
Commentary-
Today was another wild day in the markets. I
saw one great pattern opportunity come up early in the ES on the 3-minute
chart. I promise to try to expand my coverage in here pretty soon, but I'm so
busy with the intraday e-mini it's hard to get to other things. Let's look at a
chart as I saw it just before it hit the groupings.
There was a nice 5-point pattern setting up
as a test to yesterday afternoon's sell-off. Same concept I've been using all
along here. I watch for a 'pullback', hope it forms a pattern at a nice
grouping, and take my shot.
This one set up very nicely. My thoughts were also on
how key I felt the levels in here were. A failure at this area was big red
flag, attached to a stick that would be knocking on my front door, saying 'this
is opportunity, anybody home?'
Let's start with the reaction to the
grouping.
Amazing, isn't it, not only how well these
trades work, but how easy they are for me to find, if I'm patient? Sometimes
when I trade and some time passes without a setup, I admittedly get bored and
take sub-optimal trades. I'm not perfect. I wish I were (or so I think that I
wish I were), but I struggle with the same things that all traders do.
While I was
calling trades in live chat with Scott at Harmonic Trader we were discussing
this very idea, and he said something that I thought worded it just right: "We
will always get our chance, as long as we give it to ourselves." It's
there, you just have to be disciplined enough to wait. BTW, Scott will be on
CNNfn tomorrow at 11:15 AM Eastern time, be sure to catch that.
Now, at this
time I was long. Let's see what happened from here.
Nice trade so far. But since you have seen the market
today, you aren't saying what you might normally be saying, and that is: 'Jim's
going to show another big winner and how a trailing stop would have kept a
trader in for this long, etc.' This was just about it for the ES here.
Let's look at
a chart showing the action for the rest of the day.
I scaled out of some on the thrust up. The arrow points
to the area where I closed what remained of the position. It was a solid trade.
But it didn't run. Many don't. The pattern still gave me a great opportunity
for a trade.
I was able to get long on the 'retest' of the pattern, with similar
results. A solid trade but not one that ran. At this point it seemed like we
were bound for a day of range trading. I hit a few more trades using the same
pattern and groupings concepts.
Look at the chart and see if you can see a
small bearish 5-point pattern forming with the X point at the day's high. It
gave another nice, solid trade, but not one that ran. Big trending days are the
exception. It's my ability to use these Fibonacci and pattern concepts on days
like today that makes me a better trader than I used to be many years ago.
There always seems to be opportunity, if you just look (and wait) for
it.
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