Monday, October 29, 2007

relentless trending

The only truly risky part of trading mean reversion is when trends begin relentlessly moving in one direction without so much as a pullback. This morning was quite clearly one of these days. There really is no remedy for staying out of the way of these trends. In my experience, trading smaller time frames tend to give you the briefest of chances to grab an exit, today was no different. Using the 55 tick chart on Ensign there were 3 sell signals on the way up, when price finally touched back down on the lower keltner, the loss was only a collective 10 points and a buy signal soon formed a few bars later.

I didn't buy enough on the bounce, only one unit, this seems to be a remaining bias of the previous trade for the mkt to drop further than the charts gave me. This is a liability in trading a system I have to improve my faith in my system.

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