Brett Steenbarger, whom I really respect and whose blog I follow on a regular basis, pointed me to Mike Bellafiore's new article at SFO magazine. It really was one of the first to make sense to me describing patterns as result of HFT, seen in the market over and over again, while I was struggling to accept these as real.
I have struggled the last few months with my trading setups, as they did no longer work as expected. Nothing to really put my finger to, just a feeling in my stomach, that the futures I follow do not move as expected. Taking longer to break out, testing levels again and again only to spike, after I covered my position for scraps. I adapted by scaling back on my trading to nearly zero. Just placing one or two trades a day to not lose the feeling for having money on the line at all and if these did not work (or if they worked - but after I covered) I left the market to itself. I reworked my charts, to find something better fitting, but nothing feeling right so far.
I know the market will be here tomorrow or the day after, when I will have found the confidence again to trust my signals and therefore trade more aggressively.
I know exactly why I wasn't able to rework my charts the way they should be. I'm an engineer -not by profession, but by heart- and I need a logical explanation, before I trust something.
…and I had none. I couldn’t explain multiple V moves, breaks which happen only to get reversed 100% only to break again and reverse again. The moves no longer spoke to me. I was still able to formulate longer term plays, but those I don’t trade with futures. Like a Euro/USD trade which I made with my account itself moving from Euro to USD when Euro broke down below 1.48 sometime before Christmas. This trade made sense at the time I took it and still makes sense. Nonetheless it went against me 80 or so ticks at first and in futures I would never ever held such a position.
I have my further work cut out it seems. Sure, it all comes back to trust what you see all along on your charts. But, the mind can put so many doubts in your decision making process, that the opportunity is gone, once you have put them all aside.