Charts and Coffee had a great post today. If you haven't read it check it out. He hit on something I was thinking all week. To sum up his post, a lot of people were using bearish long-term to trade short-term moves. He wrote " Applying a strategy from a long term time frame across a short term or intermediate term time frame does not work."
This is something I was thinking about all week. Mainly because I anticipated this run up.
Here are 2 post I made anticipating the run up. I also never expect such a straight run-up.
Post#1: On 7/11 I noted the bullish divergence on NYMO and TICK.
Post #2:Made note of the 2nd lowest $NYDVN:$NYTV and what happens when this occurs. I even called for a move to 1000 or more and the possibility for a new bull market.
Now the reason I posted those is not because I was right, in fact the way I traded it was DEAD WRONG. I only went long in my long-term account.
Instead of seeing the bullish indications, I noted above and my analysis to get long. I played it to the short side. I let my short-term view of the market negate any bullish analysis I had. I kept seeing the market as overbought and in-need of a pull-back. That pull back never came and the market went up.
Another reason I was so wrong with this trade was I let my longer-term bearish view of the economy blind any bullishness that was out there.
Dr. Brett has a post about this as well.
This is why trading is almost all a mental game. I basically convince myself to not look at what was in-front of me. This is why you have to take some of the emotion out of trading. Had I looked at SPX and was completely neutral to the economic conditions or my own bearish views. I would have made the correct trade.
I've learned from this and it has been noted, my blinders are off and I hope to trade what I see, not what I feel.
