Just back from a 10 day holiday which was very refreshing but my hopes of the market continuing in correction mode were sadly misplaced. The market has rocketed right back to the top of the range sitting below 4100.
It always looks like trading would have been easy with the benefit of hindsight but being tired and jaded, maybe I wouldn't have done that well. I didn't think too much about my trading while I was away except to ponder/reconsider one idea that had been nagging away at me before my break.
I've been working on getting into moves early by assessing on limited evidence whether a stock has made a higher high/low. I'm pretty sure that this has quite a good success rate because when combined with a tight stop I rarely take a bath on a position while sometimes the market breaks out beautifully. What's nagging at me, though, is that I'm often just catching a small move which fails to break out and takes a week or so before it confirms this. In the end, by not getting confirmation of strong momentum am I focussing on a high win/loss ratio at the expense of the risk/reward ratio and overall profitability?
Obviously, I think I am and I'm going to look more closely at the really explosive patterns and see if I can get on board more of them at the lift off point and not during the many hours to count down.
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