Trading mid range has always been one of my weaknesses. Regardless of what time frame you are on, if you are in the middle of a range or a channel, the market is at a tipping point and it is difficult to determine the probability of what a given rhythm will be. Yesterday was an example of that. Without a doubt trading yesterday, I developed experience in trading a certain rhythm. Yesterday was a low VIX, low vol. grind higher. It traded in a very tight 5 minute channel and consisted of mini consolidations follow by mini breaks with very hard to navigate retracements.

I had the early bull bias nailed, but price neared prior day resistance, I got into trouble. My initial bias was that price would remain in the consolidation/range it had been in after Wednesdays run higher. My trade premises were thus shorts with the expectation of it rotating back down. As you can see that never happened, and I was doomed to fighting the tape, scratching and reentering higher getting squeezed all the way up. I gave back the nice profit I created this morning. When I finally realized what was happening, I started looking for fades, but given the low VIX grind rhythm, to find a fade that paid adequately was something I could not accomplish. The entries were nearly impossible to time. As the old saying goes, never short a dull market. Fades work best in emotional markets. Yesterday, that panic and emotional overshoot was not there. The rhythm was setup by the daily bull channel, supported by hourly bull trends within the channel.

 

The pink bar represents yesterday. Before the day opened, you can see air to the upside as price was in the middle of this channel. Price had also been somewhat consolidated over the past 2 days or so. That pink circle shows the bear trap that drove my bullish bias in the early part of the session. Shorts were stuck and they got chewed out. I'm not saying I should have bought and held long, or got long as it retraced from the 3rd/4th/5th pushes, but I need to recognize this market rhythm and no to not try to short it. Oh yeah, and look at 3 line break.

 

 

Trading is all about remaining objective and adapting to different market rhythms and conditions. I will admit I got a tiny bit emotional yesterday, after giving some back, I was too eager to try to get it back. I was afraid of missing the one and only fade opportunity, thinking it would really be my only chance to scrape out a winning trade. The result was loss and frustration. With each day in front of the screen, I get better at identifying when I'm dialed in and when I am not. As I build the armor each day, I get closer to that tipping point where my trading potential will breakout and my very own Chinese Bamboo Tree will grow to the sky.