So the Fed rate change came - and went. Nothing unexpected there.
The British Euro MPs show themselves up in the European parliament as the bunch of baboons that British politicians have become - nothing new there, either.
On Brexit, I was forwarded this comment from a British food critic yesterday - I can sympathise:
British food critic, Jay Rayner:
“I’m not saying there wasn’t a democratic mandate for Brexit at the time. I’m just saying if I narrowly decided to order fish at a restaurant that was known for chicken, but said it was happy to offer fish, and so far I’ve been waiting three hours, and two chefs who promised to cook the fish had quit, and the third one is promising to deliver the fish in the next five minutes whether it’s cooked or not, or indeed still alive, and all the waiting staff have spent the last few hours arguing amongst themselves about whether I wanted battered cod, grilled salmon, jellied eels or dolphin kebabs, and if large parts of the restaurant appeared to be on fire but no-one was paying attention to it because they were all arguing about fish, I would quite like, just once, to be asked if I definitely still wanted the fish."
But back to the SP500. In trading we have a number of crucial questions that we need to clearly answer if we are to get anywhere, and one of the most important of these is whether we are seeking longer term trends (mainly daily charts), or the market swings (4-hour/1-hour type charts) or the short term “jitters” (mainly 15min =>1min charts).
There is profit to be made in any of these choices, but the issue is to be clear which of these one is actually aiming for.
Perhaps the three most important components to consider here are related to a) one’s trading set-up, b) one’s own psychological make-up, and c) one’s personal circumstances (equity, time available, goals and objectives, other financial and non-financial commitments, etc).
One little aspect here is rarely talked about - maybe simply because fx retail traders mostly don’t get to this point. And this aspect is how wealth is generated from trading. It is surprising how much the general assumption is that “I am going to make a million from fx trading” or “I am going to trade full-time for a living” - even though everyone knows very few ever achieve that purely from their trading. And even amongst those that do amass great returns from trading, there are many that lose it all again (and again) on mistakes, whims, wild punts, carelessness, etc. All this only underlines that pure trading does not, for the average trader, lead to a consistent level of wealth and earnings.
There are already many threads dealing with the difficulties of trying to trade for a living and earning a monthly salary, so I am not going to talk about that now. But the other, easier, alternative of trading for equity growth is maybe worthy of some thoughts.
Equity growth trading means that one is free to trade whenever one feels there is a good probability of success - and to step aside whenever there is nothing to do. There is no pressure to “earn” money all the time. It also means there is less pressure on how much profit to aim for and how much to risk.
But the main point I want to offer here is that equity building trading does NOT mean just continually building up your account balance and forever taking larger and larger positions. It means using your trading account as a funds generator which can then be regularly channelled into other, more concrete, forms of longer term investment.
In this scenario, the objective of one’s trading policy is to reach a point of stability where one’s trading approach and position size stabilise at a level that generates a regular income that a) suits one’s other factors such as one’s pyschological comfort zone regarding risk exposure, as well as b) can fund one’s longer term investment objectives.
Personally, my early days were spent day trading on 5min and 15min TFs. It worked for me but was extremely demanding regarding discipline and patience. Even though my method was ok, it was exhausting mentally always trying to decide when and where, and with the necessary precision with such short term trades, to get in/out and, even more difficult - when not to! I did that for years and no longer have the interest (or concentration) for such intensity - so I have moved my time horizons further out.
But, at the other extreme, I am not psychologically wired for long term position trading (non-trading investment being something entirely different here). I cannot stand having trading positions open when I am travelling or doing something else that keeps me away from the markets. I want, and need, to only trade when I am ready and willing to.
So my personal “trading comfort zone” is in the 1-2 days duration. Others will come to other conclusions depending on their own circumstances.
So that is why I like my so-called BB trading method, and yesterday was a prime example of it in action. It gave a good sell signal on SP500 and, with a very small pull-back, hit its target within a few hours and the day was done. The follow-up could have been the start of a down move offering many hundreds more pips/points, but the alternative was that it would return to the former levels - which this time it did:
But the question that this raises is - how many times do such moves start a new long trend compared with how many times are they short-lived routine market swings.
If one keeps a journal of such things (as I do) it can often become clear that taking consistent “chunks” out of each swing generates more with less risk than always hoping for the new trend and taking multiple losses before catching that rare 1000+ pip trend move.
But the point here is that a trader needs to be aware of what exactly they are looking for, what are their trading objectives, what are their circumstantial factors and what is their psychological wiring regarding risk and exposure duration.
If one can answer those issues and live and trade by them then it still may not generate a profit - but at least one’s trading is a few steps away from mere gambling and erratic punting on a whim.
Just a few ramblings 
But please remember not to take any sudden excessive risks when attempting recoveries. You have shown an exemplary ability to pick short term trades and it should, and will, reflect in the steady growth of your account. And you then build your position sizes in tandem with your equity growth.
