Great Day In The Live Trade Room, Made Over $700

Market Commentary 1-12-10

We began our trading day in the live trade room today with a very slow and sluggish market.
Every morning we have to IDENTIFY the market we are going to attempt to trade and today’s market made it very clear that once again, patience to wait for the very best high-percentage trades would be a must.
With very little volatility and even less “follow-thru” we had to be aggressive with our defense when making trades, and that proed to be exactly what we had to do!

Our first two trades of the day were both scratches, which mean we enter the trade and exited the trade at the same price level…

Given the situation, we were pleased to be able to exit both of these trades without a loss, which is a credit to our ability to follow our simple exit rules.
Our first trade was on Gold @ 10:26am EST, a Breaker Pattern.

We followed our rules to get into the trade, but then when we entered the trade we quickly noticed that the market had died and our indicators were telling us to GET OUT QUICKLY!
It’s vital that we understand how to have confidence in our EXITS, just as much as our entries and this was a prime example.

After we got into the trade, we saw the MACD Indicator move below the zero-line, the momentum indicator pointed down, and the Pace of Tape Indicator turned to RED, which means the price action is slowing down and we need to exit this trade.
The best way to exit a trade early is to…

· Watch your indicators first, they will tell you when to be looking for an exit
o MACD
o Momentum
o Pace of Tape

· Look for a way to get out without a loss, somewhere at your entry point
· If the market is above your entry point, simply move your stop up to entry to lock out the risk on the trade

· If the market is below your entry and you are facing a loss, move your stop up to entry and the market will  force you out of the market for a small loss

· Don’t over-react, wait for the best time to get out
· Do not simply flatten your position, give yourself the opportunity to make a profit if the trade ends up moving in your direction.

Our final 2 trades were both winners, and the trade that made us the most money today happened when we least expected it!

You always need to be ready and prepared for what the market can throw at us, and the final trade on Crude Oil was a great example of that.

Just when we thought the market was dead, it picked up the pace of the tape and gave us a great Breaker Pattern Set-up just before the end of the morning.

The final trade on Crude Oil made us 66-ticks, totaling $660usd and $760usd TOTAL for the day.

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