We had a long discussion about picking your spots today with our desk. How many of you who are professional day traders feel as if you over-traded today? Today was a day where that was easy to do. But let’s take a look at the last 3 hours of the trading day and particularly with LEH and FNM and discuss how to better pick your spots.

When did the market offer the best trading opportunity in the last three hours? A quick look at the XLF with the chart above demonstrates the very end of the trading day- specifically when the XLF dipped below 18. When this occurred LEH tanked and FNM traded lower.

The XLF was just trading in a range between 18 and 18.20 for most of the afternoon. And then in the last 15 minutes of the trading day the XLF cracked 18. This was the time to be aggressive. I know some guys on our desk were working very hard trying to trade LEH and FNM from 1-3:45PM. But the real money was when the XLF cracked 18.

Learn when to be aggressive. Look at your charts to determine entry points that offer you a favorable risk versus reward. Often trading is just waiting. And today was a perfect example of that. Short LEH or FNM when the XLF cracked 18 was a chop. So pick your spots when you are trading. If you do so you will keep some more money in your pockets.