FOLLOW YOUR PLAN
I harp endlessly about how important your psychology to implement your methodology is. In my opinion, it is THE determining factor in your trading, and so I want to point out something truly extraordinary with respect to the last 36-48 hours.
Firstly, I mentioned either via e-mail, Twitter or message boards that it was prudent to let the market figure itself out before entering a new trade. There were too many newbies trying to be a 'contrarian' and buying the opening on the ES contract yesterday afternoon. There is a fine line between being contrarian and going with the trend. This simply comes with experience and cannot be taught.
So lesson #1: In panic situations, you must let the market establish itself before entering a new trade.
Secondly, the hard thing to do on the open was to buy it. Had we opened anywhere near the ES 1070 area this is what the forecast would have looked like:
Intraday ES Forecast (assuming opening print ES 1070)
However, this is what it actually looked like on the open:
Intraday ES Forecast (actual opening print ES 1080)
This was my indication to both cover shorts and go long. This is what it looks like at the moment:
Intraday ES Forecast (last trade ES 1097)
There was no fear, no panic, no nothing! Just simple rules I follow day-in and day-out, to the tee and every time!
Now, I don't say this to boast! I'm saying all this because I truly want to see people succeed in their trading and my hope is that this example convinces frustrated traders that if they could only get passed their psychological barriers, then an entirely new way of thinking about the markets opens itself up.
The big 'project' I am working is to precisely address this issue.
