Morning Update: 1/5/2012

2:01… am

The ES_F has been trading in a tight channel and closed flat today after coiling in a range to the downside currently sitting  at the 1270 area. Volume still seems thin and so the market behavior can feel foreign and confusing. Today my trade choices were not good at all. I found myself being impatient and trading small structures.  Both trades NQ_F, ZB_F were losses primarily due to the trade location not being an extreme but rather  in the middle (noise) of a larger degree balance. I reentered both trades (probably from anger) which were losses an hour later… at which point I stopped trading for the day.  My risk parameters allows me to trade until I reach a 4% draw down at which point I reduce size by 1/2 and stop trading for the day. If I reach 6-8% draw down I stop trading for the week and reduce size by 1/2. If I reach 12%-16% draw down I stop trading system entirely and re evaluate the following month.

We are still holding two swing positions ES_F, YI_F both of which are positive and doing extremely well. I moved the stop ES_F to 1235 locking in 35 handles. I also moved the stop in YI_F to $28.44 locking in $1.50. Will be taking it light for the remainder of the week as we have news Thursday and Friday in addition to the  light volume. Nonetheless,  I will always be looking for balance areas and vertical development the foundation of my methodology. Trade journal has a history of trades and current open positions.


Olof Thomas


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