Day trading refers to the practice of speculation in securities, specifically buying and selling financial instruments within the same trading day, such that all positions are usually closed before the market close for the trading day. Traders who participate in day trading are called active traders or day traders. (Thanks Wiki!)
Yesterday I took a number of positions – under the general premise that:
- Risk on will continue.
- Safe haven currencies will continue to be sold.
- Technical analysis suggested a reasonable place to enter.
A full day later and “good ol Kong” is clearly in the weeds on the trade. The USD has continued its upward move, and the Yen has clearly not “sold off” any further.
Reflecting on this we have much to learn:
- My position size ( my entry position ) is so small that I could really care less.
- If indeed I choose to remain in the trade ( which I do ) I will easily double my position at any given time…and then again double…and then again double if greater opportunity presents itself – If I choose.
- I can easily enter new positions in other currency pairs to “off set” further downside, as I will have learned from this “poor entry” that other “good entries” must be available in the opposite direction.
- I can blow the entire thing out – cry about it for about 10 seconds, and get my ass back at it as I’ve done countless times before.
Hmmmmmm…….decisions decisions……point being – If you swing for the fences and trade too large vs your actual account size / bank roll you don’t allow for this kind of scenario. Anyone who thinks they can pick a “magical entry” time and time again – will be back working at McDonald’s by weeks end.
You get good at this by checking your emotions at the door – and trading within your means. I’ve got more options than I could imagine in a market that can only go up, down or sideways…..and we all know I hate sideways.
In a general sense I’ll give it another day or two in that…..I fully understand that pushing the upside here is exactly that – pushing. Frankly – I still don’t see a single fundamental change and have a hard time seeing the USD do anything more than this before rolling back over. “Tops” don’t just flop over in a day – but I am very aware that the process is underway. I still think we see some kind of “euphoric blast” upward before this thing hits the skids as this just looks to easy. Wall Street needs to take things “past extremes” to get the last one of you off the couch and on the phone with your broker in fear you’re gonna miss it. That’s when we see the top.