Rhythm showing a 2 hour bear trend channel within the daily bull channel. There is air on the 120 min channel as well as air on the daily channel. When these two rhythms align around 1650, I think there will be very high % long premises. Today we just chopped around inside of the top of that 2 hour trend. The high % trade today was the buy at the open, air fill to the top of that bear trend. Tonight something will give on the debt ceiling incident. Something will either be passed or in a more surprising turn of events, the gov't will temporarily shut down. Either way I believe there will be some sort of price reaction that could muddy the waters OR provide some great opportunity. Bottom line is be careful, stay patient and play your game. Not taking action is always better than taking losing action.

I hated today's action. As the market opened, I never was able to get in synch with the rhythm, pace and market pattern. I was also strapped for time because I had my other business obligations looming. I don't know why, but I was putting on position in a market I had no feel for. Maybe because I felt pressured to get something going because I wasn't going to be there all day? Or maybe I became complacent due to recent successful trades. Either way I got chopped up in that red circle there. No bother though. Every mistake is just an indication of where I am in my development as a trader and provides a lesson on what I need to do to improve!

Price traded in a range again today. But todays support and resistance levels were lower than the prior days. Could be a sign of weakness... Also, a slightly sloppy head and shoulders pattern is forming on the high time frames. Could see air on the daily channel fill down to 1650 if this breaks down. The break is hard to catch, so don't get emotional and try to preempt it, there will always be opportunity in the wake of a market splash. Let things develop and let the logical side of your brain stay in charge.

Week 3: The Tao of Poker

Rule 249: Enter the white fear. A really devastating loss can change your perception.
There is a certain kind of loss that is psychologically crippling. It is of such intensity and dimension that it takes the wind out of your sails and knocks you completely for a loop. It is both the magnitude of the loss and the way it happens that grants it special recognition, moves it up into your "Top-5" list of horror-shows. It almost feels like a personal offense, a betrayal the way it happens.

Will such an occurrence make you change your long-term approach? Probably not. But you'll never think of things in quite the same way again. Something changes in you. For you now know this type of situation is out there. it can exist and it can happen. From now on it will always be in the back of your mind, and will color the way you view the world forever.

 

Pretty inopportune action overnight. I caught a nibble at a long at that green dot. But price seems to really be on the fence at this 1690 level. I guess as long as its holding above I'm biased long. Be aware though that sooner or later a direction will be decided upon.

The 1690 support was tested about an hour after the open. Price traded below support for about 15 minutes, probing as low as 87.5. By retaking the 1690 support, stuck shorts set up a great long premise. As you can see on the 15 min. chart above, this second 1690 probe short showed a weaker stochastic. This plus the VIX (which isn't pictured) gave added conviction. I entered at the green dot when the bull cup patters was completed. Price eventually ran out of momentum at the 1700 resistance, which has proven to be legit. It finished down back at 1690. This has been like an extended MATD oscillation environment reacting to Friday's bear trend. Looking forward to see how this develops. #dialedin

Overnight price traded in a tight range respecting 1690. Twice it tried to trade up, trapping longs in the 62-63 price (red dots). Could possibly fuel selling if this breaks down the 90 support. On a trader development note, I am starting to literally feel in my body the difference when I look at a premise I want to take for emotional purposes and a premise I want to take out of detecting objective opportunity. Ne3ed to remain focused on developing this "feel". Star pressing the objective feel and trade very lightly on the emotional speculations.

The hardest part about trading is not  trading. I spent the hours between 3 am and that green dot getting chopped up in the markets trading a rhythm I did not have a feel for. The sequence I took at that green dot lasted a mere 3 minutes and erased the deficit I created up to that point. When I entered that trade, I knew it was a high probability hand. I knew that everything I did before was trash. The only problem was I didn't know it until I figured out what the rhythm was and understood how strong the premise was for that buy. I am starting to get sniffs of what it's like to feel a rhythm and trust it. What I need to focus on now is when I don't feel that rhythm and not trading when I don't have it. It's very simple to grasp but difficult to do.