Day trading report Jan 30, 2008: -$560

[][]A hell of a ride today from the FOMC at 2:15pm. The day was pretty quiet before the announcement. Then at about 2:14pm, the price broke up because the FED lowered interest rate another 50 pts to 3% as expected.

I tried my scalping strategy explained a few days ago, it didn't work! After losing about \$1000 in the past week on these scalping trades, I think it's time to admit that I suck at it and stop doing it! A few bucks here and a few there accumulated so quickly. Until I have thoroughly developed and backtested a strategy, I should not use it in trading.

On the other hand, my Keltner + Stochastic strategy is working well. The only problem now is that I need to be more confident about it and let my profit run. See this graph below of this fading trade I took after the price shot up on the FED outcome. I knew that it's going to come back down to fill the gap. And I knew that I shouldn't be reading my fast time frame. Instead, if I enter on the intermediate time frame, then I should exit on the intermediate time frame too. I knew that the bounce would take us to the other side of the channel but I exited way too early because I looked at my fast time frame and lost confident.

[][] The reason is that earlier today, I had full intention of waiting for exit signal on the intermediate time frame, but the \$200 bounce ended up to be fake and I closed out at a little loss on that trade. The price movement seemed the same at the time of my exit, so that spooked me out of a potential \$700 more profit. I really shouldn't let my loses cloud my judgement. I should just learn from it and move on. In hindsight, the difference is that this afternoon trade had a HUGE run prior to it and my CCI + Stochastic signal was on too, whereas the moring losing trade only moved from mid channel and CCI signal wasn't on. Lesson here is that if there are more than one BUY/SELL signal on, then the move would have higher probability and would be bigger too.

There's still a lot for me to learn.

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[]: http://bp1.blogger.com/_Vlx60iTPx5s/R6DarxzQQjI/AAAAAAAAALc/MuuFkCxOuQU/s1600-h/er2_daygraph.jpg []: http://bp0.blogger.com/_Vlx60iTPx5s/R6DcshzQQkI/AAAAAAAAALk/Tb9XerDhN7A/s1600-h/er2_dive.jpg []: http://bp1.blogger.com/_Vlx60iTPx5s/R6DdIxzQQlI/AAAAAAAAALs/Ilw-teEBHCI/s1600-h/er2_day.jpg