Wish I had better news to post today but I hit my stop limit today after 2 trades and stopped trading very early in the morning.

I missed the first hour of trading due to a doctor’s appointment and which perhaps threw me off my game a little but that is no excuse for poor judgement. In hindsight though, I should have waited for the 5-minute oversold conditions to resolve one way or another before making any trades. I got caught up in the chop that occured right at the bottom of the day’s range before prices turned back higher.

See below for one of the trades.

This is the type of play that normally has very good follow through to the downside. BUT (and it is a big but), followthrough(FT) reliability decreases dramatically on this kind of a channel breakdown the more mature the trend is. Here the 5-min (or 610-tick) had been in a downward trend since market open with little FT on upside corrections.

So I attempted a scalp as prices broke down concurrently with the 55-tick TRIX & $TICK. Usually this is a powerful combo that will give me my 2 ticks. But in addition to the maturity of the trend & Oversold conditions, the other warning sign that I ignored was the width of the channel. It was not tight & controlled like I normally like to see but broadening. My plan calls for staying away from broadening channels as they usually require a stop to be placed much farther away which increases risk.

On this trade, I got in at 705.80 and went for a scalp with a stop at 706.50, but clearly this was a mistake given the circumstances. I think I just got a little too trigger-happy after a long car-ride to the Dr.s :-/ For starters, any legitimate play here would require a stop at least in the vacinity of 707.50 and there just wasn’t enough downside/profit potential to warrant such a risk.

Bottom line, I got what I manipulated my rules here to get into the trade and got what I deserved. As my next trade wasn’t much better, I hit my stop loss limit for the day and missed the ensuing rally.

Patience, Patience, Patience.