Looking at a daily chart of the DOW, we’re sitting right at the 38.2% Fibonacci retracement level. Of course past performance is no guarantee of future results, but for some inexplicable reason. The market and the golden ratio work well together.
My last trade featured on this blog was PCU. I actually didn’t get into this trade because it gapped below my entry level. We may still see PCU breakdown, but there isn’t an entry at the moment.
I’m not seeing to much out there right now. Primarily because some burst water pips took me out of trading last week. So, this week is going to be spent getting back into the groove. It’s important to be able to recognize when you shouldn’t trade. One of my primary rules of trading is to do what I call homework. It isn’t enough for me to breeze through a couple of charts and have a plan of attack for the next day.
I spend hours pouring over charts. It’s the only way I have found I can keep focused and producing good trades. So my rule is that I require a minimum of 6 hours of analysis each day before I am “allowed” to trade the next trading session. Right now I’m down almost 40 hours with the loss of last week.
I am a believer in deliberate practice. If you want to be great, you need to practice repeatedly, over and over again for years. However, your practice isn’t enough. You need to practice with a focus on getting better each time. Your practice should be measurable and repeatable.
How do I apply this to trading? Well, I review thousands of charts through the lense of my trading methodology. The methodolgy doesn’t change. Whether I win or lose, I write post trade analysis reports on all my trades. Over the years I’ve gotten alot better at identifying trades that will work with my chosen methodlogy. It’s because of these hours that I’ve been able to get where I am. It is because of these hours that I’ll sit out this week until I can get enough practice.
