SchoolofTrade.com Daily Commentary 01-20-10

We made over $1000 today in the live trade room on only 4 contracts.

We took our first trade of the day on the Gold, and honestly, we jumped the gun a little. Yes, we are all human, and sometimes we make mistakes.

The pattern looked perfect, we had lots of support from the BIG buyers, but we didn’t have enough Pace of the Tape, which is why we decided to cut the trade early for a small loss.

Once we got into the trade, I noticed right away that we made a mistake…
Red Pace of Tape, and it was DECREASING

Momentum Curled over from being OVER-BOUGHT (oh no!) and pointed down against our position

Once we saw that, we knew we made a mistake, and had to aggressively get out of the position, which meant moving my stop from 6-ticks below my entry up to my initial point of entry, costing us a few ticks of valuable profits.

Here’s a Good Rule of Thumb…

AGGRESSIVE ENTRIES REQUIRE AGGRESSIVE EXITS.

You simply cannot have one without the other.

This first trade on Gold was an excellent example of that…in order to be able to confidently enter an aggressive trade, I must first identify confidence in using my EXIT rules to cut the trade early if I don’t make the right trading decision.

Sure enough, after this minor mistake, we settled down, focused on our mechanical rules, and stuck to following them 100%.

Losses are a part of trading, it’s how we HANDLE those losses is the difference between going home in the RED or the GREEN

• $ 1,007.50 4 Contracts

• 855 GC 2-STEP LONG @ 1124.0; -1(4) = -4TICKS (-$40)

• 943 GC 2-STEP SHORT @ 1122.1; 4(2)/1(2) = +10TICKS

• 1004 TF SHORT @ 37.6; 4(2)/8/5= +21TICKS

• 1011 EURO 2-STEP LONG @ .4123; 4(2)/8/7 = +23TICKS

• 1017 GC 2-STEP SHORT @ 1116.O; 4(2)/8/1 = +17T

• 1056 GC BREAKER SHORT, SCRATCH, STOP TO ENTRY @ MOM CURL (0)

• 1104 GOLD SHORT @ 1110.4; 4(1)/1(2) = +10TICKS

• 1110 RUSSELL 2-STEP LONG @ 631.3; 3(2)/1(2) 3-STRIKE RULE = +8TICKS

• 1119 GOLD H/R BREAKER LONG @ 1111.2; 4(2)/1(2) +10TICKS

• 4 CONTRACTS NEEDED!

• STARTED OUR DAY WITH A LOSS!!

See you in the trade room tomorrow @ 745am EST!

Previous Day’s SOT Video from YouTube: Review Our Trades From Yesterday!

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