Pivot High

Just a reminder, no Forex trading next year from Christmas Eve until after the New Year Holiday.  I knew better not to trade the day after Christmas,  My USDJPY trade just never retraced, ouch!  How dumb of me, one of the few conditions is that I don’t trade over Holiday’s nor Thursday evenings for fear of a trade not finishing up by Friday evening.  I might start trading Thursday’s, I’ve been trading the last 6 months in my practice account and I’m up money for Thursday’s.  Anyway, I’m still sidelined for trading Equities, tempting, but not worth it…  I’ll wait until January 2nd and believe me it will be cautious trading through the rest of January due to the light volume.

I should have stayed in bed this morning after watching the open.  I traded EBAY short which did finally work out but very whippy, I had to take two shots at it but in no way was I going to take a loss today in EBAY.  I also shorted USDJPY as it gaped up huge at the open and is really over bought at this level.  Although I believe I’ll make money on the trade, I did not realize that many banks in Europe are still closed today, the day after Christmas and I would have preferred not to have taken the trade because of the potential volatility.  Next year I’ll know better to look at the financial calender first.  I believe I’m going to take the rest of the week off, early on in my trading career, I’d be trading every day during the Holiday season, but now as a season veteran, there is no need to risk any capital with these light trading volume days.  Next year I’ll just plan ahead to take a break starting Christmas eve until after the 1st of the New Year.  Just to make a note to myself here, Thanksgiving week was pretty good week of trading Monday through Wednesday, take Friday off!  I took the whole week off since I was cooking, but I think next year I’ll trade at least the mornings Monday-Wednesday.        

Over the last few months I have really started to perfect my trading by using tight stops vs. allowing my losers to go to a full stop.  My trading was excellent today because I went back to keeping my stops tight and looking for every way to be able to technically, move up my stop.  Many will disagree on this but I like to always go in full share size in the beginning and if you do this, you must manage your trade and zero in on a lower time frame to make sure price action continues in the direction of your trade or you need to kill it!  I’m a profitable trader every time I manage my trades early on and get them to profitability Vs. allowing them to go to a full stop out.  Another revelation is to only take trades in stocks that the price action is slow enough that you can safely get out of a trade without having to take a full stop, this happens a lot on gaping plays where price can be volatile and you should wait for the price action to slow down.  I’ve also noticed on my RIMM trade today that price can swing like a pendulum where price moved down quite nicely only to retrace taking out my break even price.  Hey, If I’m up one risk unit and price comes all the way back to my break even point, I really don’t want to be in the trade anymore.  Take your stop and what for a new play or if your stock sets up again, take a 2nd try.  I did this in RIMM but this time I had more shares, a tighter stop, and I started to offer shares out as price moved lower, as before, price moved back up into my break even point and I killed the play, but this time I had some profits which I walked away with Vs. traders in my trading room all took full stop outs.  Now if you happen to start your trades with a reduced share size, then you can hang in with your trades with the hopes of adding to your play where appropriate.  I’ve just never been good at this and end up going to full share size in the wrong area or never getting to full share size and having to watch the play go with tiny shares.      

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