I find it fascinating chatting with new traders in this industry. Typically when they come to me they've moved beyond the Holy Grail indicator and systems dream and have come to recognise that it's time to develop some skill instead. Skill in real-time reading of price action and market sentiment. What amazes me though, is the number that still hold some belief that once they learn price action, then the game will be easy.
Here's a reality check. It doesn't get easy. You just get better!
Sure, there are days when everything sets up perfectly and you're dancing in perfect step with the market.
But there are also days when you're completely out of sync and just tripping over your own feet.
And then there are the majority of days which fit somewhere in-between these two extremes, where you just do the best you can despite your imperfect decision making.
Let's look at one of these days. A day when I struggled to maintain confidence in my read of the market; and a day in which I struggled to execute well.
The result was a good profit (considering my poor performance). But it was messy. None of the trades were held for any significant distance, despite a nice trend.
The session was a recent FOMC day. I don't trade post-FOMC. It's 5am. Seriously… there's a limit to how late I can stay up.
I do trade the market prior to the FOMC though… but this is carried out with CAUTION.
My expectation for a session leading up to a significant news event is for a higher probability of a narrow range quiet market.
If that is what the market provides, then I have no interest in trading. Hindsight may well show there was opportunity available at the edge of the range structure, but I'd rather sit on the sidelines and survive to trade another day. A good result would be quick recognition of the narrow range environment, and NO trades.
However, if the market can show some directional conviction, then I'll trade this for as long as the directional move lasts and for as long as I have a good feel for the bias. And more often than not with reduced position size.
Here's the 5 minute chart (Higher Timeframe chart) which shows the session open through till just after midday (which is all I trade).
Let's examine the 1 minute Trading Timeframe trend within the first hour (and just beyond) and see how it was managed.
There was no outstanding trading here. There's no showing off how good I am. I struggled with this "obvious in hindsight" trend.
But there was survival.
And generation of a profit.
This is the reality with trading.
While there are sessions in which we kick massive goals, there are MANY MORE in which we just grind out a result. And for me… grinding out a positive result on a "Trade with Caution" news day is a good result.
It's easy to look at this chart after the fact and say, "Well I would have entered short immediately the market rejected the opening break above prior day's high resistance… and then held for a test of the prior day's low… profiting from the whole 30 point move!"
That's cool. I really hope you could have done that.
On this day… I couldn't.
And that's fine too.
Because while I'll review the session and consider the lessons that it offers, as to why I struggled to trust the directional move so much, I also recognise that there are days like this.
You won't outperform every session. But you won't underperform each session either.
Just keep moving forward.
Work to get better at identifying underperformance. If you can recognise it quickly you can either correct it or stand aside and stop the damage from becoming worse.
Work to get better at identifying outperformance. If you can recognise quickly that you're in perfect sync with the flow of the market, you can better take advantage of this opportunity for as long as it lasts.
And work to get better at the grinding, struggling sessions in-between. Your aim is to ensure that more often than not they're falling on the positive side of the breakeven line.
It doesn't get easy. You just get better!
Keep working! You can do it.