AbeSmith 7-27-07 YM

[AbeSmith]

Today was a very uncertain day IMO. The dow is down 1.54% at the close. I couldn't find any good setups because the volitility was very high, and so I didn't make any trades today but did pay close attention to the chart most of the day looking for something, but never felt comfortable enough to enter a trade. Yesterday the chart looked very clean. Lower lows, higher highs. Green candles were followed by mostly green candles, and red candles followed by mostly red candles. But today we had a very colorful and unpredictable chart IMO, compared to yestarday at least. On CNBC they were also saying that today had very high volitility and uncertainty. So I was not able to clearly determine the sentiment of the day, but now I see that it was a bearish day.

It seems that to trade in a high volitility day you have to have a higher risk tolerance. One thing that other traders have been advising me is that I make too many trades and short duration trades, and one reason that is is because I have low risk tolerance. So today especially I was reluctant to enter setups. I wonder if it was mostly me or if other traders also stayed away today.

[Blu-Ray]

	Quote:	AbeSmith
	On CNBC they were also saying that today had very high volitility and uncertainty. So I was not able to clearly determine the sentiment of the day, but now I see that it was a bearish day. It seems that to trade in a high volitility day you have to have a higher risk tolerance. One thing that other traders have been advising me is that I make too many trades and short duration trades, and one reason that is is because I have low risk tolerance.

Abe

Just a couple of things for you to mull over,

Firstly you're still watching CNBC - and despite what you might think, it WILL put a bias into your head.

Secondly, there's nothing wrong with taking short duration trades, so don't let anybody talk you out of it, because yes, scalping does allow a lower risk tolerance. But this is the hard part, you have to have a prestine set-up where you're only going to take the higher probability trades, and this will ( should ) eliminate overtrading as well.


Hope this helps

Blu-Ray

[OAC]

Today's action was choppy, but the movement of the day was a
normal consolidation after yesterday's drop. In the morning,
the market rallied to test yesterday's POC, then at noon it went down to test yesterday's low, then the rally failed in the late afternoon, then it sold off hard.
There were numerous setups today.
What really gets me is that I normally look at intraday charts all day, don't
normally look at the daily chart until the market closes. I noticed that the
last 2 days had really huge volumes in the cash indicesSPY, DIA, IWM...etc)
I wonder if anyone else has noticed this and what this might mean ?
I think in VSA terms, this market has a very negative bias. Wide range bars closed near the lower extremes, heavy volume, and one key support failing after another ? Any comments ?

[torero]

	Quote:	OAC
	Today's action was choppy, but the movement of the day was a normal consolidation after yesterday's drop. In the morning, the market rallied to test yesterday's POC, then at noon it went down to test yesterday's low, then the rally failed in the late afternoon, then it sold off hard. There were numerous setups today. What really gets me is that I normally look at intraday charts all day, don't normally look at the daily chart until the market closes. I noticed that the last 2 days had really huge volumes in the cash indicesSPY, DIA, IWM...etc) I wonder if anyone else has noticed this and what this might mean ? I think in VSA terms, this market has a very negative bias. Wide range bars closed near the lower extremes, heavy volume, and one key support failing after another ? Any comments ?

Support is in danger of getting wiped out one after another, especially for daily S/R. I usually go to weekly but best of all monthly S/R to find strength, stronger than daily or weekly S/R to find real areas of support, especially in this very bearish market.

[AbeSmith]

	Quote:	Blu-Ray
	Abe Just a couple of things for you to mull over, Firstly you're still watching CNBC - and despite what you might think, it WILL put a bias into your head. Secondly, there's nothing wrong with taking short duration trades, so don't let anybody talk you out of it, because yes, scalping does allow a lower risk tolerance. But this is the hard part, you have to have a prestine set-up where you're only going to take the higher probability trades, and this will ( should ) eliminate overtrading as well. Hope this helps Blu-Ray

Thanks Blu-Ray. It's nice to know that short duration trades can be made to work. As for CNBC, I guess it can make one biased or distracted. But I do find it useful.

[AbeSmith]

	Quote:	OAC
	Today's action was choppy, but the movement of the day was a normal consolidation after yesterday's drop. In the morning, the market rallied to test yesterday's POC, then at noon it went down to test yesterday's low, then the rally failed in the late afternoon, then it sold off hard. There were numerous setups today. What really gets me is that I normally look at intraday charts all day, don't normally look at the daily chart until the market closes. I noticed that the last 2 days had really huge volumes in the cash indicesSPY, DIA, IWM...etc) I wonder if anyone else has noticed this and what this might mean ? I think in VSA terms, this market has a very negative bias. Wide range bars closed near the lower extremes, heavy volume, and one key support failing after another ? Any comments ?

Looking at the 6 month chart I can see that the market is testing the major lows of the chart. It will be interesting to see what happens next week.

[AbeSmith]

	Quote:	torero
	Support is in danger of getting wiped out one after another, especially for daily S/R. I usually go to weekly but best of all monthly S/R to find strength, stronger than daily or weekly S/R to find real areas of support, especially in this very bearish market.

Thanks for the info Torero.

[james_gsx]

We closed at the .382 for the YM, the ES is within .50 and .618 for a retracement. I was just waiting for the YM to hit .382 and look for a possible bounce Monday.

Abe, I would strongly suggest to turn off the TV. I can't tell you how much that helped me, I got to see the market the way I saw it without anyone else bothering me. It's okay to have the TV on I guess, just turn down the volume.

You have market internals to tell you what the market is doing, I would suggest you take the weekend to learn how to read those internals and apply them to your trading. It's okay you didn't take any trades today because you didn't see any setups, that's following your plan and practicing sound capital management. But don't prevent yourself from trading out of emotion, that will just lead to emotion while trading and you'll wipe out your account.

I have noticed some progress, just realize all traders go through what you are and at least you have the balls to tell the world. I respect you for that.

[AbeSmith]

	Quote:	james_gsx
	We closed at the .382 for the YM, the ES is within .50 and .618 for a retracement. I was just waiting for the YM to hit .382 and look for a possible bounce Monday. Abe, I would strongly suggest to turn off the TV. I can't tell you how much that helped me, I got to see the market the way I saw it without anyone else bothering me. It's okay to have the TV on I guess, just turn down the volume. You have market internals to tell you what the market is doing, I would suggest you take the weekend to learn how to read those internals and apply them to your trading. It's okay you didn't take any trades today because you didn't see any setups, that's following your plan and practicing sound capital management. But don't prevent yourself from trading out of emotion, that will just lead to emotion while trading and you'll wipe out your account. I have noticed some progress, just realize all traders go through what you are and at least you have the balls to tell the world. I respect you for that.

Thanks James.

[brownsfan019]

Abe - please turn that TV off. CNBC is of no use to you now or in the future. Their sole job is to keep you watching so you watch commercials. That's it. And to do that, they have to sometimes hype stuff of that simply is not there. And like others have said, it can easily put a bearish/bullish undertone into your trading whether you realize it or not - Example: On CNBC they were also saying that today had very high volitility and uncertainty. So I was not able to clearly determine the sentiment of the day, but now I see that it was a bearish day.

So CNBC said there was uncertainty, but you later saw a bearish day. Obviously CNBC didn't have a freakin clue and as a result it looks like you just watched some nice action unfold b/c CNBC told you so....