Registered: Feb 2009
05-15-09 06:10 AM
Additional comment about today's action
As readers know, we anticipated a move down to test previous Value Area Low at 882. Taking the trade we monitored the Cash Dow and watched the move continue a little further down before correcting back up. The wiggle from 882 down to 880.50 is not unusual.
In this market we favor scaling out. Also we advise traders that position sizing matters greatly. Knowing what we know now, we would not be trading less than 12 contracts, and we would be scaling out at 2, 3, 5, 7, and 10, leaving 2 contracts to run. In current volatility we suggest scaling the last two contracts at 13 to 15 pts, leaving the last contract to run to end of session. This is how we would be approaching position sizing.
Generally speaking we terminate open positions when the cash market closes.
Those capable of critical analysis can quickly determine that trading for a few ticks doesn't work. Simply put, a retail trader cannot overcome expenses that way. In fact, to make a good living, one has to capture as many outlier trades as possible as they are the difference between a decent year and a great year.