Wednesday, September 08, 2010

The OODA Loop

Once again we find ourselves in a low volume, short trading, plus holiday week with many questions unresolved. Not an easy environment to trade in if you're focused on trading the SPX and so forth, but there are some beautiful bullish and bearish setups out there if you do a little homework and are so inclined. While we often focus mainly on the SPX and /ES on TTW, if any of you (lurkers included) would like to share some individual trades you're watching, please don't hesitate to share. The rare earth group has been a wonderful trade for the past week, for instance- so that's just one idea out of thousands to profit from. IOW, while waiting for the general market to make up its mind, there are profits out there in both directions and we should avail ourselves to those regularly.

Moving along- I have a few charts, both dailies and hourlies to share, plus something I stumbled on last night called the
OODA Loop. Some of you might be familiar with this concept, but if not, I found it to be highly applicable to trading, and hopefully you'll pick up something from it that might improve your own technique, too. The link takes you to a Wiki article that includes a flow chart that is worth considering as you plan your trades. No, we’re not looking for an “enemy” target while trading, the enemy is often our own thinking and emotional reactions. But I think the process of planning your trade and mentally executing before you take the trade can be highly beneficial and hopefully, can become second nature. To watch the pilots like you’ll see below in the Blue Angels video is beauty in motion. If you can mentally prep for your trading like they prep- imagine the results. ;-)

Enough of that, let’s look at some very simplistic charts. Also, keep in mind our good friend and trader, Brandt, is keeping us posted on his 3C negative divergence observations, while the chop slops on. Stay focused, traders ;-)

qqqq_9_7 qqqq_hourly_9_7
spx_9_7 spx_hourly_9_7
iwm_daily_9_7 iwm_hourly_9_7

P.S. Welcome back, Los Gatos. Glad to have you back and posting.

Pump it up…. with precision

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