Odds today were for the CL and NQ futures, I tweeted these out in the morning but did not have the time to place trades like I normally do.
NQ: High chance of a gap fill, and if we break previous day’s low, stats were suggesting an early morning fade and an afternoon buy the dip.
While the NQ didn’t quite close back above the lows, the bounce was large enough to produce profits. The gap filled worked out fine.
CL: CL had a good chance of closing above the open. After a slow grind lower, CL put in an afternoon bottom to make new intraday highs by the close.
Odds for this NQ trade were bullish, however, there was a high chance of a gap fill. I waited for that minimum requirement to occur before getting long. Why get long before the gap fill if we know there is a high chance? Once it filled, and I saw the VSA, I entered. I exited before the previous highs since only 55% odds of closing above.
I could have reentered later in the day, but I didn’t. This is mostly a lack of discipline, I didn’t want to lose my profit for the day. But I need to remember: when odds are there, just take the trade. You cant predict which trade will win or lose.
Stats for the NQ on the day were bullish. I wanted to get long an a dip, and when prices started to rush lower, I entered. This was one of the biggest drops in weeks and I figured it was overdone. I was wrong. I had a big draw down and almost cut the trade, but because the odds of breaking the low were only 30% or so, I decided to just leave the stop below yesterday’s lows. Few bars later I was feeling better. I cut near the close for a pretty decent profit.
Notice how I broke the VSA intraday rule. I didn’t wait for a green bar to end the selling pressure before getting in. Too greedy.
Stats showed a small chance of breaking out of previous day’s high for the NQ. The plan was to short rallies near the previous high in the NQ. I took the short on the first test and made money, but skipped subsequent tests that would have been in line with the stats, mostly because I did not want to lose what I already made. If the odds are there, I should just take the trade. Keep this fact in mind: if you have a system, you must take all trades. There is no way to predict which trade will be a winner or a loser. It’s hard, I know, but it’s a matter of survival. Trade well.