The answer.......................

Well, this where common sense and experience comes in, two qualities a purely mechanical system will never have !

First, you must know that you are in the quiet part of the cyclical nature of trading cycle (see post below), so you are not anticipating big profits. This is a mistake many amateurs make, they seem to expect big profits everyday this simply does not happen in the real world.

As you can see from the chart, the TF had reached the level of the prior wave b low, but had not quite reached the DP from this low. Yes the DP is the “normal” first target on a quiet day, but what do you do if you are “almost” there.

Well, I would suggest looking to see if you could lower your stop to lock in at least a small profit, And for this I look for minor swing pivots to use. In the Russell there was one at 0.7R Profit, so this made a good place to lower stops to.

As you can see, this is where common sense and experience can help over a purely mechanical system.

Thanks, Steve

A question on the 5min Russell Index

Hi Everybody,

Although it was a quiet day yesterday, there were a few trades, for example this TS3 sell on the 5min TF (Russell Index). However the trade management was slightly tricky, as the trade was nicely in Profit, but did not reach any of the projected targets,. So what should you do in a circumstance like this ?

Please see the chart to the right to see the position. Sitting on a +3R open profit and almost at the DP from the prior minor low.

Thanks

Steve

The natural cyclical nature of trading.....

Hi Everybody,

It was another quiet day on the US e-minis yesterday, but then this was to be expected. As I outlined earlier in the week, because we have had a very good week last week, we should now expect some harder days and some quieter days. This is just the natural cyclical nature of trading, where the good times are followed by harder and quieter times before the good and profitable times come round again. Your job as a trader during these harder times is to preserve your trading capital so you are ready to take advantage when the good times come round again.

Too many amateur traders get frustrated during these quieter times and as a result start making silly trades, which then frustrates them even more with unnecessary losses, so they then miss the good trades when the come round. By knowing how markets really works, and understanding the natural cyclical nature of trading, you can be ready for these quieter times, and as such know that there will be less trades and also a few small losses. This prepares you to not get frustrated, so you are then ready for the profitable trades again .....

Thanks

Steve