Day trading report Jan 22, 2008: +$1200
The FED came out with an emergency rate cut of 3/4 pt today. The market was bound for a small rally. So the Dow moved from a negative 400 something point to almost breakeven and then closed down a 100 pts. There were many wild swings today. Many opportunities for a day trader.
Although I seem to have done well today, I think I could have done a lot better.
Even though I knew the Dow is going to go up at least 200 pts from open, I only captured about 150 points of it. I was hesitating a lot after my winnings because I worried about losing my profits like I did before. I need to be objective in my rationale.
However, the later day action were a lot choppier and the ATR were a lot higher. Staying on the sideline may be a good decision. For my later trades in a volatile setting, I may want to increase my stop because I have missed a few good trades even though I was ultimately right.
On the other hand, my exits were a lot better today. I wasn’t bagholding nor was I ragholding. I got out when I should rather I was winning or losing. In addition, my tight trailing stop method saved me a few times. Although it did got me out too early a few times too.
Lastly, I have adopted this new screen which I developed over the weekend. It’s based on the triple screen strategy by Dr. Alexander Elder. The big window is for my main time frame. Then two more charts for a 5x higher and another for a 5x shorter time frames. I only enter a trade when all 3 (at least the lower 2′s) are in sync. Then I exit when either the short or current time period shows weakness.
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