Tuesday Log – Keep “Swinging the Bat”

Thanks for the baseball analogy ‘E’. It really makes sense when we are planning a trade.
We need to know what the situation is, if we swing are we looking to make a productive out, put the ball in play, try to get a hit or be aggressive and go for the fences.

Trading and baseball are very similar. It’s a game of failure and averages. If we strike out, we look to our next at bat and swing the bat again. .300 hitters “fail” 2/3rds of the time yet they are considered to be the best in the game. The next AB, they know that their ability and their average will deliver the hit eventually because they “are due”.

Same with trading. When we are wrong, we adhere to our stops and wait for our next trade (AB) set-up. If we are in a profitable day, we lower risk but might be more aggressive with our target. This was the theme for me when comparing yesterday and today.

Yesterday I was in a couple of bad trades, but dug out of the hole. Today, I started out well and ended well. Shorted after I realized the range. I wasn’t looking for the “big” trade. I was looking for scalps (singles). I was conservative throughout the day, pocketing “small” profits while giving a “little” back. Result: -0.75/+10.5/Net + 9.75

At the end of the day, I saw a trade set-up at the lower end of the range (not lowest) but wasn’t positive it wouldn’t go lower so I put on half the position I normally would have, thus reducing risk. Went short with 74.25 and stop under today’s open of 72.25 and was stopped out. Then, I saw a lower risk set-up in the 71-72’s and put on a full position long at 72.35 with a tight stop under the recent doji low.

I scaled out with 50% off with 2 pts and the last of the position I was more aggressive with a trailed stop up to 76’s which was my extreme target. Entry to exit I had a total of a 5 tick difference between the LL and HH. I trusted my plan (my swing) and worked it. Result: -2.0/+ 5.5/Net +3.5.

I kept swinging the bat. Yesterday and today, I took my cuts and eventually my ability to achieve success trumped my “failure”. I moved on, looked forward to the next AB and summed up the situation. I still need my batting coach (E and E-Nation), but with more practice, every at bat will be considered successful.

Trade Well !