Nov 2021 - Lesson of the Month

I always start my trading day out with multiple time frame analysis. Today, I noticed that Natural Gas futures were trading at the low end of a large 4 hour range. This became an area of interest for a potential long during peak trading hours. 4-hour candles can seem like ETERNITY for a day trader who is used to scalping tick charts. However, I like to make sure there are no higher time frame, powerful walls in my face before the trading day.

On the intermediate time frame (30 minutes in this case), we can start to see the structural change to an uptrend: Higher highs and higher lows.

Execution time!

Noticing one of my entry setups on the lower time frame chart (5 minutes), allowed me to engage my long idea. But, this is not the point of the lesson.

After feeling great about my higher time frame analysis and finding a “perfect” setup on a lower time frame, I only did half my job. Now the final part of my job is trade management. Here is where all the mind games can come into play:

What about if it turns on me?

What does that ONE reversal candle mean? Should I pull the plug?

It moved fast towards my profit. Too fast? Should I just take this profit before it turns around just as sharply?

Trust me. I know the head games. Let’s start with one tip to help alleviate some of that sense of urgency to micro-manage. Perhaps manage on a higher time frame. You will get less false signals, it will slow you down in decision making (so you aren’t as frazzled with every tiny movement).

So, would you like to see and feel this?

Or chill out and revisit it every xx number of minutes (in this case 30 minute candle closes) and potentially allow yourself to catch a bigger move?

Day trading can be exhausting if you are staring at your P/L or at every micro move. Give yourself a minute (or 15 to 30) to breathe, while you give your trade time and space to potentially work out!