Quote from Girlpower:
And obviously you feel like the entire market was watching your trading finger for it to press the button to exit so it could go on down...?
... ES especially does wiggle a lot, trying to shake out all the weaker players ahead of a good move.
IMHO, a trader CANNOT be accomplished until he realizes and understands the fundamental reasons behind this!
"Feels like the entire market is watching ..." is in fact precisely what happens! This is caused by pro's that literally create this situation to appeal to your emotions until you can't stand it any longer, pull the trigger - and get shaken out!
The pro's are just waiting for you to do it - So they have a thinner market on their side (less comp), more volume (many exchanges are run largely by ppl who profit from volume rather than price) and more liquidity, plus they can get better fills!
To you, it's pure torture. To them, it's easy, low-risk money (because you're giving it to them out of fear/greed)!
Once you know and understand this, your trading will change dramatically. You can now turn the spike around and go with them!
Most traders sit in the tree with their "standard" stop-losses and discretionary stops.
Smart traders, however, see what's really going on by looking at bid/ask levels, Tick Fib retracements, fair value and logical overextension. That way, they can use this "shakeout" to add to their position at very low risk - Rather than stopping out!
Another good thing that can help with your trading discipline is to ask yourself (when you're anxious to exit) whether this would be a good opportunity to stop-reverse your position. If it seems like a pretty low-probability setup for going "the other way" and you just wouldn't do it, then chances are you're going in the right direction! This can help immensely. A famous trader's rule says that the best time to go long is when you're exiting your short.
But I won't emphasize on this. Handle that with care. Just look at whether the opposite position would be a good trade, and if it's not, then you may consider a premature exit.
Go with the real pro's. They know what they're doing. Ask Natalie, she knows
"Don't sit in the Tree - Shadow the Shaker and shake with him!" is my personal motto here.
This is probably my most fundamental trading rule!
Play the spikes and wiggles if you can. - They give brilliant scalping opportunity - Always have this in the back of your mind: What goes up fast, tends to come down fast! And vice versa.
If you don't want to play them - At least know about them!
Know what's going on! Don't be a blind fool for the pro's.
Remember, there's only 2 kinds in the market: Lions and Zebras.
You can only be one. Choose wisely because there's only one right choice. Pick and then stick. Emulate.
Good Luck, and Happy Trading!
~The Scientist
