If I could have a penny for every setup I felt enthusiastic about and that invariably blew up in my face I would be… well, a lot richer than I am. To be honest when it comes to picking juicy entries off a chart I rank about average. What may set me apart from the rest, and what has helped me survive in a wide range of market conditions over the years was learning to overcome my instincts and engage in setups that scared the heck out of me.

… Take It! Yogi Berra played, managed and coached the New York Yankees from 1946 through 1985. Yogi is known for not only his baseball career but also for his countless expressions that were memorable because most of them didn’t make any sense. However, every one of them has some truth to it and some of his quotes even relate to trading. Does “It ain’t over till it’s over” ring any bells?

So here I was sitting in my trading lair this morning, staring at my E-Mini chart for what must have been an entire hour. Whilst digesting the price action a whole range of emotions and thoughts passed through my mind which I attempted to process and internalize without becoming attached to one particular perspective or directional bias. I usually pride myself of maintaining a relatively neutral outlook on things, but was forced to admit that seeing the index futures pump higher overnight was creating a strong sense of frustration. What was going on?

I am somewhat occupied today but since we are clearly heading into rough waters I decided mix things up a bit and do a blast from the past which may benefit especially some of my newer readers. If you think the past year has been rough for you then understand what may loom straight ahead will test your mettle and skills in ways you may be unprepared for. This post aims at highlighting a few common misunderstandings and confusions that traders from all stripes seem to chronically fall prey to.