First ER2 day trading Jan 28, 2008: +$240

[][]I thought of just mental trade today because it's my first day at ER2. But then the signals were so good that I had to take a position. It ended up well. I think this is a good way to limit myself, I simply wouldn't trade until I thought I just had to take it.

Also, it seems that the first 2 hours and last 90 minutes of the day session were easier to trade. The moves were more obvious.

Once I got my first trade in, I started to continue using my strategy. However, like yesterday, there were many false positives. But unlike yesterday, the price movements were less dramatic and I was able to inch up my stop so even these wrong trades didn't eat me alive.

After like 3 or 4 false positives, I just stopped trading for the day and watched Wall Street Warriors. Unfortunately, just minutes later, the price finally broke and dived like I thought. It would have been an easy \$700 there. The uptrend kept inching up until RUT broke 700 points (the line of the bear, major resistance). I didn't think ER2 would break 700 so I entered at the hesitation ceiling but it broke. When ER2 is about 704 (RUT=701), there was another hesitation ceiling, I took a short and got stopped out because I moved my stop to my entry. I thought the price would go up again so I didn't try again. Then just a few minutes afterward, the price finally broke down like I thought it would.

I could have entered a short at 703.80 and put a stop just above the day's high, 704 something. It would have been a few pts of risk. But the profit potential was high because we've been moving up all day and the signals have been in OB for all day too. The break could have been significant. I should have kept trying because the risk/reward were good and both technical and fundamental were on my side.

What kept me from entering is remembering from last week's experience with YM. False positives can easily eat out an account.

So lessons from today:

  1. Sometimes it take a few tries for the price to break.
  2. If risk/reward is really great and strategy says enter position, it might be worth another try.

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