Well it looks like I’m finally getting my wish of seeing how
this new system handles under adversity. I suppose the only way to know what kind of a drawdown a system can/will
take is to experience a drawdown. It is pushing -6 R-Units. But that does not factor in the mistakes that I made which would not be repeated.

Today started off great! Within the first hour of trading I
was up 2 R-Units, but then everything went to hell. I came to a realization
today that should help me to retain more of that profit in the future.

Botttom line, for AKAM, RSAS,
& RBAK: All 3 started off with a great breakdown in the morning which is
part of the reason I was up a quick 2 R-Units…but all 3 went on to give me a
loss for the day & I now understand why…

It is a mistake I have been making for a while now &
just realized it today. I have already
made the adjustments to my trading plan to account for the problem going
forward.

In short, all 3 of those plays were Counter-Trend
plays. Which is fine
according to my plan as long as there is sufficient Reward/Risk to justify the
play. The problem is that while
the R/R may be right, the fact that they are counter-trend trades makes them
more susceptible to reversing. As such,
once entered, they should be MANAGED via the 6o minute bars and/or 15 minute
pivots instead price targets. For unlike a with-trend breakout/down, if these
reverse, they likely won’t be coming back.

That is the first change…For those of you who have been
reading long enough to remember, my old methodology used to incorporated
this into the calls but I’m only now realizing that my new system was lacking
here.

The second change I will be making going forward is to take
advantage of quick, early morning breakouts (RBAK & RSAS this morning for
example) and cash them out quickly instead of holding them all day hoping that
they will make it to their targets. As I
have already mentioned, Price Targets is the weakest part of my game at the
moment, so If I can score .60+ within the first 5-60
minutes of trading, then who am I to decline the gift?

If I cash out the profits, sure there may be instances where
they go on to hit the target, but more likely, those explosive morning moves
right out of the gate are exponential in nature and will experience a sudden
& violent snap-back. By cashing out
I can A.) Try to enter a reverse/fade to take advantage of this snap-back. & B.) Wait for the snap-back to stall & enter continuation
breakout in the original direction of the move.

Other than that, there’s really not much more I could have
done today. it
was just a classic pull you in & reverse kind of a day with AKAM being the
most severe example of all.

Good thing is that rarely do we have 2 days like today in a
row…so get ready for Monday & have a nice weekend!