Warrior Trading Blog

Fighting FOMO Again +$172 | Steve’s Futures Pulse 210

Steve_9.10

Hey, what’s up, fellow traders? Trader Steve here. Happy Tuesday. Well, how did we do today? Well, I got to be honest with you, today I started with those feelings again, two days in a row, of having fear of missing out. FOMO. We talk about this all the time, how you look at a chart where there was a great move, you missed it, and that you feel like you’re missing the boat. So you want to maybe chase it, or revenge trade because you’re mad about missing on a great opportunity. That’s the feeling I had as I looked at many of the futures markets in the overnight, looking at European session, and to kick things off here today. So that was how I started my day today on Tuesday. Remember, yesterday we barely moved into the green.

Well, guess what? Here’s what we did today. Saw a breakdown opportunity in light sweet crude as my first trade of the day, and it wasn’t meant to be. In fact, I added on two occasions to this trade, only to get stopped out and start in the red. Basically, I assumed my 12 consecutive green trading days was going to come to an end, but then copper happened. Okay, high grade copper, an opportunity to place a bullish breakout trade came to life and we even had a chance to add to the position on a consolidation pattern where we pulled back into a value area, and then our patience paid off. We held that position. We held. I told all kinds of stories to occupy my mind, not only of me but the members, and then our patience paid off. We got the big break. You’re going to see that on the chart in just a moment.

And then last but not least, we still were just a little short of break even at that point, but I found a little snippet of a trade in the gold for our third and final trade today. And that put us back in the green. Not by a lot, $172, but just enough for that 13th consecutive green day. So let’s look at the charts here. Let’s learn something. That’s the most important thing here as we’re doing our recap here in the afternoon.

This is light sweet crude 10 minute chart. Here’s the current quote of course, still alive and well, ticking away. And I want to talk to you about the entry point. That was back here, if you focus in on this area right here, we start to see the market breakdown below $58.25 and then it actually started to break down below 58 bucks a barrel. The short position, the first entry into this was $57.99, that’s when the signal was generated. And actually at that moment, that’s right about here, look at all the downside space. Now, in Market Profile, we’re looking for these open spaces where we are moving away from the congestion. If you are new to Market Profile, what it is is we take the volume, which you see down at the bottom of your pane down here, we flip it sideways like this and it gives you a horizontal representation of volume, but with one important extra element, which is price. So see how you can see these lines in the background there extend furthest from left to right, so this zone is your congestion zone.

So the trade was really a breakout mode bearish play that the market would emerge outside of that congestion zone and follow through to the downside. Time and time again we, as technical market profile traders, look for markets that are moving vertically fast away from these congestion zones. Well, guess what? Wasn’t meant to be. So I’m going to highlight the $57.99 area, which is right there, and look, very quickly into the trade, market starts penetrating back higher. And so actually I still liked the trade at this point because I had expectation that it was going to stay down below that demand zone. So added at $58.14, not once but twice we did that. Wasn’t meant to be. Market continues its climb higher and then at $58.42, which is right there if you can see where I’m drawing that yellow scribble on the chart, that’s where I called it quits on this trade.

So I’m kind of got a silent, red start to the day, and basically I mentally thought pretty much the streak was coming to an end. Now it’s not like I trade just for a great win streak. These things come and go and there’s losing days too. There’s such thing as losing streaks as well. And so I’m on the sideline with a loser, it’s part of trading of course. But then I went to the copper chart. Okay? Shortly thereafter I went into the December contract copper, and I’m going to talk you through this chart because it ended up being basically the comeback trade. A totally different market of course, but a trade that offered us a nice opportunity to get back basically the lion’s share of what was lost in the crude oil.

So here we go. The copper started giving us a break to the upside here this morning and the entry point on the long side of copper came in at $261.95, which is right here. Okay? No, actually it was, sorry, I was looking at the wrong place, right here. So we started actually breaking up above here. And look what the high of that bar is. $261.95. Just my luck. Now look what happens here after this. Now, this is really interesting. Market comes down and then finds support. So when the market comes down here, down on this trade, so basically I’m mentally 0 for 2, even though we’re still in this trade. The initial stop on this one was $260.80, by the way. Okay? So which is right here, okay? A little bit down below that technical low.

So the market starts pulling back and then it starts to actually gather up some support on our POC. That’s that aqua color line right here. So I’m going to write POC, which stands for point of control. It’s a projected mode of the statistics, the most frequently recurring price as we look ahead. Okay, so when markets start to kind of sit on this little platform here technically, they gather up support. The longer they stay there, the longer they kind of hold above that aqua color line. They end up being some decent opportunities to think about adding to a position. So we did just that. We added at $261.45. So initially here, and then it wasn’t looking good and then we come up, added here because we had some real nice support on the trade, and then look what happens.

So it was a little bit later market comes up, it stutter-stepped. In the room when I was talking I said, “Boy oh boy, I think this patience is going to to pay off.” And then you can see exactly what happened. Market surges higher, it basically pops higher and was able to cover at a few different places on that ride higher. First one was at $262.40, which is right here, as the market started penetrating higher. The next place was $262.80, which I’m going to highlight right there. And then last but not least, $263.25, which is right there. So we scaled in on two occasions, scaled out and three different price points and got, again, the lion’s share of what we had lost on the crude. Crude, by the way, was down $57.60. I know, not great. Obviously digging into some of the green over the last couple of weeks. But got $55.12 and some change back in this copper patient trade.

And then last but not least, I’m going to go over to the gold. Here you go. Here we go. And then this one actually was a very short-lived trade, it was near the end of my time that I was going to spend in front of the screen, and found a nice little opportunity on the long side in gold near the end of the day. The entry point on this was $1,503.70. I’m going to show you where that was back over here. I’m going to show you which one. It’s this bar right here. There you go. Right over here. $1,503.70, this is the bar right here, okay?

And the market popped up. We were able to actually get out of that relatively quickly. $1,504.40, it was under four minutes, I remember that. So it was $70 a contract. They had six units, so $420 on that one. That was actually just enough. It just worked out that that was enough to move us from having a small red day. We were down about $247 on the day before getting into the gold, and then $420 on that one. So $172.50 basically is how today finished on three separate trades. Again, the theme in the last couple of days, if there’s something to be learned, is that avoid fear of missing out. There’s always another trade. There’s always another day. Be okay with no trade days, which I’m not ashamed to do and I’ve done a couple of times in the last couple of weeks, had no trade days over the last three weeks.

And then also having patience and realizing that if things don’t go well in one market, provided if you’re within your risk capital and risk tolerance, considering another trade and being able to mentally separate the negative outcome in one to a fresh start and a mutually exclusive opportunity, meaning that it’s not related to the other, and being able to treat it as such is important. Because that’s when you can have an opportunity to find a comeback opportunity in a totally different market within the same trading session.

So I don’t know, I’m not going to call it a little bit of dumb luck, but had a bad bounce the first go, a good bounce the second go, and the streak continuous. 13 consecutive green days and that’ll take us into the middle of the week. We’ll see what the markets have tomorrow. And look forward to making you be a part of it. So I hope you learned something here today, getting inside the mind of today’s session. And if you’ve got any comments, obviously comment down below. If you don’t have any comments and just enjoy the videos, give me a thumbs up. Maybe tell a friend to follow as well. Look forward to meeting you back at the market soon. Until then, trade well.

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