Volatility during consolidation is where I make money.
Unless I’m already positioned, days like today are where I struggle.
Market is tanking….wait for retrace to enter short…. it drops another 50… keep waiting, drops another 10, sod it, I’ll go short with wide stop.
In the following 4 minutes it shoots up 50 points, I close through fear…. it goes up more, “yep, I was right to close”, then pulls back a little, then I’m thinking, this could have been the lows, enter long, it pulls back a little more, hold on tight, 10 minutes pass by and its consolidating, then out of nowhere a 35 point candle appears in seconds smashing through the previous low.
Rinse and repeat!
After all that you look at the chart in hindsight and its technically perfect with all the obvious short entry levels staring back at you, and you think, how the hell did I lose £XXX today when if I actually took a few moments to study what was really going on, I could have compounded entries and made £XXXXX
I think the cause of such scenarios is through having seen totally different outcomes in previous sessions, for example yesterday DOW rallied from the lows and I just couldn’t see any technical reason for it, as far as I was concerned it HAD to go lower, yet including overnight futures it moved up 300 points.
After the market has rallied that far so quickly you doubt your analysis and don’t commit to the trade as you convince yourself you must be wrong. Then miss out when the move you planned for takes place…. as it did today.