Note: This is a blog entry I had written but left in draft mode about 2 years ago. I totally forgot about it but regardless of it's age, it's still appropriate. I don't recall if I was going to show the charts I was watching at the time or not but I wouldn't have the foggiest idea what charts those would have been in the hundreds I've captured over the years.
The Psychology of Trading Time
One of the most difficult aspects of using "Time" as an indicator is not whether to buy or sell at "Time", but to NOT buy or sell at "Time". Why is this? For me it's because when I've done my work right, the left side of the chart will have hit after hit where the time markers are spot on. Even down to the minute if I drill down that far. So it's inevitable that when I see that next time marker coming up to want to lean into the pitch and swing for the fences.
But of course not all hits are good hits. Buying into resistance and selling into support are recipes for disaster regardless of whether price has made a nice move into the time marker. In baseball, a good pitcher will beat you because he knows how to work the count. You know what pitch is coming and you know not to swing at it but you do anyway and end up grounding into a double play. It does not matter that you knew what pitch was coming. It was the wrong pitch to swing at for the situation. The pitcher knows this, your coach knows this, and you know this. So you end up riding pine for the rest of the game.
Last night I bought into resistance knowingly because I was itching so bad to make a trade instead of waiting for the right setup. My time marker was a good entry... that is if I were trading the 1 min. chart looking for 10-15 pips for 10-15 minutes max. But I was so sold on my daily chart projection that I ignored a major trend line and the 45° lines. I lowered my lot size because of the risk and felt the trade was justifiable because of that.
I woke up stopped out of course. Subsequently, price dropped right on down to 360° of price and time squaring up perfect for a beauty long. But now I was gun shy. With 2 outs gone, I was sitting on a 3-2 count looking right at a hanging curve ball over the plate and I watched it drop right into the catchers glove. There went the setup I had waited 2 days for.
Now the itch was really on. I tried shorting 3 times at time to catch a retrace. In other words I was on tilt.. juggling knives.. revenge trading. 3 losses in a row. All small because I lowered my lot size even further, but stupid trades none the less. So I benched myself. Turned off the charts and went and checked out the hockey headlines.
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