Lots of patience required

I took a close look at the daily ES charts for the first time in a while.  Although I'm mostly a scalper, I shouldn't loose sight of the bigger picture, so I'm going to incorporate that into my daily review.  But what surprised me the most was how the average daily range has changed significantly since the beginning of January. 

You don't need to do any type of fancy analysis, just look at the size of the bars from December and prior, and compare them to the narrow range bars in January.  That's one reason why it has been much more difficult to utilize the strategies that worked so well only a few months ago.  So, as I discussed yesterday, I will adapt and adjust to the changing market conditions.

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Tuesday, January 24, 2012

Total gross profits:  $200.00 +4.00 ES points
Total trades:  3  [1 scratch]
Accuracy:  100.0%
Execution score: 100.0%
Opportunity cost: +$0  +0 ES points

Patience.  That's what was required today, and a lot of it.  Without the volatility from the recent past as discussed earlier, I will need to be even more patient and wait for the best opportunities. 

So it was a good to be able to use the extra time to reflect and bounce around ideas on ways to take my trading to the next level.  For one, my mental game will always need attention.  That will be a given as long as I trade.  But from a more tactical level, how I scale out of my positions based on 1 contract will also be something I will review. 

However, since I believe I have achieved the level of "consistently net-breakeven trader" more often than not, it may also be time to start revisiting plans on how to manage the scaling out of trades with 2 contracts.  I will target next week to begin implementation of the new plans.

On another note, I do admit that there are times when I feel like I'm taking 2 steps forward and then 2 steps back.  But then I quickly realize that little by little, step by step, I have kept raising my game and have been making measurable improvements.  I've already mentioned this before, but just in the past several weeks, it's amazing how much my ability to follow my trading plan has become "easier" (although it's never truly easy). 

Now that a good solid foundation has been established, it's time to start building on top of it.