Those who believed in the Bull presumably went long or stayed long and were happy as their belief paid handsomely.
And then, there might have been some traders who despite their disbelief reposed faith in their mechanical trading system and participated in the trend. Which was up in case you did not notice it.
This episode - in which I did not do well - has again brought home to me how mechanical trading system / rules can help trader set aside their emotion ( fear/disbelief) and trade in the right way.
After all, when most of the moving averages are so beautifully aligned UPWARDS and keeping a constant gap between them, why shouldn't you go long?
You see the very terms belief and disbelief are rooted in human thought processing - in contrast to something like rules in physical sciences - for example, when an apple falls on your head, you may experience disbelief and other emotions but the apple did not care, it had to fall. And whether you believed or not liked it or not, it fell!!!
Not to belabor the point, the mechanical rule ( for instance EMA lining upwards ) does not care about your belief once they have been formulated - the rules are not handicapped with disbelief.
Don't get me wrong. I am fully aware of the importance of belief systems in many spheres of human life. What I am suggesting, however, is that with respect to trading the proper and rightful place of reasons and beliefs are in formulating the rules and not in minute to minute trading decisions during the madness of market hours.
In other words, put all your reasons and beliefs in formulating the system. Once formulated, believe in the system and not in your thoughts/beliefs during actual trading.
OK, now coming back to how did I do yesterday?
Embarrassing to admit - especially after such theorizing above - but I did not do well. I kept waiting for a dip - a big dip - that never came. Twice I followed slow stochastic to catch a potential turnaround - a dangerous thing to do, but at least I used an instrument, slow stochastic, rather than gut feel - and thrice I got stopped out - and then finally I went long around 4880 spot only to get out after ten points as I was overcome with worry that I must manage my loss for the day to a smaller amount. Loss!! On such a day!!
But there are silver linings - Just about two months ago on a similar day I would, like a deranged person, try to catch the top and go short repeatedly thereby losing 70-120 points ( in a day!) . I have now learned to NOT TO DO THAT - clearly my learning is not complete otherwise I would have shorted perhaps only once and not thrice - but my learning and improvements are in the right direction.
I write all this, dear reader, for two reasons: ONE, it helps me to learn even more efficiently. Public disclosures always has that effect that it reduces the chance of fooling yourself. And TWO, I hope there are some readers who may not only learn from my experience but also regain a sense of hope and self worth which are two biggest casualties when you lose money in trading.
Thank you for your time and Good luck.
If you have any comments please write to me at stockmarket.methods.in.madness@gmail.com
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Disclaimer: The above analysis is just that - my analysis. If you choose to trade on the basis of this analysis, you will be solely responsible for the outcome of the trade - profit or loss. Please keep in mind that trading and in particular day trading is not for the novice and there is significant risk of loss of capital in trading.
@Student, i enjoy reading your blogs very much and also chatting with you. My view is trading intraday is mechanical and positoinal trading is an art.
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