I love trading. Period. It’s easily the most challenging/rewarding thing I spend my time doing. Analyzing charts, updating trade screens, backtesting ideas. There’s nothing better!
It didn’t always used to be this way though. When it came to trading I used to be frustrated and stressed out and unhappy.
Why? My performance sucked.
I was always buying tops and selling bottoms. I didn’t know anything about expectancy, or win loss ratios, or top down trading, or building a trading system. But once I got those things under control (it took about 4 years) I began to see a shift in how I think about the market and how I spend my time trading.
Those are the things that helped increase my performance. Not a new type of entry or a top secret piece of trading information. Just me. And my outlook.
I bring this up today because once again my simple trading model has worked. It kept me out of the carnage from the August drop. And it kept me out of the back and forth chop of the last couple months, and now it has me looking for longs once again.
Trust me, my method is not rocket science. It simply puts things in the order they need to be in. General market >> >> Market Sectors >> Individual stocks >> Entry signals >> Trade management. It’s called the top down approach to trading and I take absolutely no credit for creating it. LOL. But it works.
Sure, it produces whipsaws and consecutive losses but those are the cost of entry and yes, they are very hard to manage. But as the great Ed Seykota said: To avoid whipsaws, stop trading.
As it’s my goal to continue trading I will continue managing my self and understanding the downsides.
With that said, here are the index charts for this week:
Starting with the hourly…
Oh yeah -- cruising along!
Yeah — we have simply rocked since the double bottom reversal earlier in the month. Then we crossed the 50 hour moving average, got a nice continuation signal and have been cruising ever since. The new recent high looks a little weak but a new high is a new high.
Next up, the daily…
Look at all that nasty chop and slop!
And it looks like we might finally be out of the slop and chop here. Wow. What a couple months of back and forth. An absolute heaven for counter trend traders though as they got to fade all those new highs and lows and clean up. But now we’re above the 50 day ma and that,s where I like to be to look for longs. Would I like us above the 50 on the weekly – sure – but there is a thing as waiting too long for confirmation.
Next up, the weekly…
This is really not looking all that healthy to me. Oh well...
This is the chart I like the least. It just looks nasty to me. That’s why I’ll be keeping my finger on the trigger when it comes to any trades I have going.
So what do you think? What are your thoughts for the market? Your thoughts about trading? Post a comment below and let me know!
This post was written by...
David John Hall – who has written 127 posts
David has been trading non-stop for 6 years. He lives in Redondo Beach, California (an awesome place to live) and is super stoked to be able to blog about his passion here.
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