The Journey – October 11, 2012

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Mellita, domi adsum – Honey, I'm home


Before I start today's commentary, I would like to thank Eddie for contributing by way of providing a link for a neat add-on for the FireFox browser which notifies you of a new comment being added during the session at the helm.  Secondly, I want to thank David for his questions.  The more the merrier ... keep them coming!

Pretty true to form, and probabilities, after Tuesday's expansion of range, Wednesday's range was smaller.  Being smaller, the movements during the day were also smaller and not as straightforward (one directional) as they tend to be when the daily range is larger.  Please note that I am not using absolute terms, rather they are relative. No magic number crunching to establish average ranges or the like ... simply relative to the period before.

This meant that, even before yesterday's session started, probabilities were not in favour of an easy ride.  And so it came to pass.  Three campaigns, 1 winner and 2 losers with a net loss of about 1R.  No big deal. A more logical thing to do, in some ways, is to take a day off from day trading when probabilities are not in your favour.

Even the vast number of setups that appeared on the 30 minute chart below attests to how many changes of direction there were during yesterday's session. This is one reason why the MM (what this stand for is in Acronym City on the right) rules have the built-in safety value that I mentioned in real time last night.

In one of the many articles on this site I illustrate the effect of the previous day's relative range has on the results of intra-day trading using a RBT approach.  The same concept can easily be applied to weekly and daily RBT's. The effect seems to be robust.

Whilst you may think my L.I.V.E.T.M. approach is for day trading, that could not be further from the truth.  In fact it was born in the 1980's when I was trading on a weekly basis with occasional daily finesses. This was what suited my lifestyle and goal requirements back then.  My instrument of choice was options on US futures ... from the grains to the precious metals to the S & P 500, even US T'Bonds.

Later I switched to US futures and for the last little while (say 10 years) it has been the FX markets.  Again lifestyle and goal choices dictating the change.  Life is not static and at different stages of our lives we need and do different things.  Sounds like I am getting old, I guess.  Time does not stand still!

In this series of daily commentaries, I update mainly real time, real money campaigns on an intra-day basis to speed up your  learning curve.  Many more rollovers in a 6 hour session to illustrate concepts and rules than having to wait 24 hours for the next day to complete. One long forgotten aspect of success (in this day and age of instant gratification and 30 second attention spans) is repetition, repetition and more repetition.  Call me old fashioned ... it has been proven over centuries that it does work.

The daily chart of the Euro below shows that the FO1R short is still in play with the TSL above yesterday's high.  The smaller daily range has negative implications for the movement down, whilst it has positive implications for the session ahead.  This is a great example of the language of the market assisting you in planning, irrespective of whether you trade on an End-of-Day basis or intra-day.

Moving forward, yesterday provided a C3D buy setup.  It is significant to note that the trend-ette is still down and there is no formal VS trend in place, despite the market 'obviously' moving down.

Exactly the same message is present in the Cable. In both market the TSL is locking up about 1R.

For those of you who are in a suitable time-zone (that is awake as it occurred at 1.oo pm my time here in Vanuatu), the chart below illustrates what has been on offer so far today ...  a textbook TDR buy which is currently showing more than 1R for your efforts.

And what is the effort ... it is acquiring the knowledge, having the commitment to succeed and the discipline to  only  spend about 3 minutes at each rollover at the helm.  In this case just every hour or so.  In many cases the market will actually tell you whether to attend or not!

Do you have what it takes?  I have no idea ... only you can answer that!

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