One Chance Is All You Get

ES Chart 25-01-13

I’ll come back to this later but I wanted to get the idea down.

I’ve noticed on my trade setups that the time for action doesn’t come twice. It’s a common occurence that I see a good setup, I hesitate or decide to sit-it-out and it tempts me a second time.

The second time is a bad time to take the trade.

Here’s the example from Friday which got me thinking about this. It falls into the ‘chasing’ category which I’ve learned the hard way to avoid. Parabolic rises trigger an alarm and I start looking for divergences and weakness, for a fade.

In a strongly trending market this is not a “safe” trade, but merits looking for another entry long, if you’re so inclined.

The right entry was just above Friday’s open, and 1497 was the number everybody was watching. The RSI divergence was just asking for a short entry with a target at the 50% retracement. If you made that swing trade, that was a smart trade. If you waited and stuck with the 1497 resistance/stop looking to fade a second time, it would never have worked, atleast on an intraday time frame.

ES 28-01-13 ChartInterestingly if you look at this morning’s action you might have got lucky holding over the weekend.  And now you have a second chance at a long entry.

Should you take it?