Nothing's Gonna Change My World

Wednesday, Aug 15, 2007

Nothing's Gonna Change My World

By BoomerX65

Wednesday, Aug 15, 2007 02:48

"Pools of sorrow, waves of joy are drifting through my open mind, possessing and caressing me" Across the Universe -- John Lennon Ok, so now you know I am a Beatles fan. That line sums up the emotions of trading during this recent increase in volatility. No matter how much we try to control our emotions, do we ever really suppress the joy catching a runner or the sorrow of having our stop loss taken out? Yea, yea, yea..I know that we can't let our emotions dictate our trading, but that doesn't mean that we don't have any emotions left to experience the ups and downs of winners and losers. It only means that we have to trade objectively and not allow our emotions to override our confidence in taking our setups. So this brings me to these past several sessions of extreme volatility. As one who favors trading around the pivots and fib lines, I experienced mixed results over the past two weeks. I was less than pleased when I realized that a 20 point stop loss was not enough to contain the swings of this market environment. The thought of using 40 point stop losses was not very appealing to me, especially when I was getting by using a 10 point stop loss on most of my setups. "nothing's gonna change my world" It sounds so good when the Beatles sing that line, but does it work for the trader? Ok, so I was forced to make some changes to my stop loss levels and my profit levels. I was also compelled to reduce the size of my positions too. The one thing I did not do is change the basic game plan that I have been following for several months. After all, why should I? Are the pivots and fibs no longer effective in a volatile market? I think not. All that was required was a few adjustments to mirror the current market conditions. There was no need to throw out my setups and drastically change my trading plan. Have you noticed that certain trading days favor certain trading styles? One day the pivots are gold. They are like having your own ATM machine. On another day, it's all about trend trading and order flow as the price blows right through the pivots. The important thing to remember is to trade your plan each day and not alter it every time the market shifts a little or even a lot. If your plan is time tested and proven to be profitable over a period of several weeks and months, then stick with it during the ebb and flow of rising or falling volatility. That brings me to today -- Wednesday -- August 15. Today was a pivot & fib traders dream come true over the first 90 minutes of the session. I realize that these kinds of days are not going to be the norm, but if we stick to our plan, every time tested style of trading will have its golden days. "nothing's gonna change my world" David http://www.tradethemarkets.com/public/838.cfm