Here we are, at the end of week #5. I crossed the $3,500 threshold this week. I am pretty happy, except for yesterday's small loss, and the recent variability in my daily P&L. At my goal of "2% average per day," I should now be getting about $70 per day based on $3,500. So you can see this week, on the whole, was a bit of a setback. This week was an interesting one in the markets with some HUGE down moves. It seems like the market finally woke up to the evil domino effect of production being halted in China due to the virus, and the resultant supply chain issues. But maybe it's just an excuse for big players to take profits and buy again at better prices. I am guessing a lot of BULLS went to the slaughterhouse this week. In that light, the fact that I am still standing is a big sigh of relief. Normally I knock it out of the park on bearish days, but even I was caught off guard and was off my game. Thanks for putting up with my oak tree analogy. It is such a powerful allegory, analogy, metaphor, example, etc. for me.
(I wrote this yesterday but never posted it.) What a day! Should have been an options trader or had a big account with a short on. Someday I will be able to do both of those. I was so right about the impact of the virus, and finally everyone listened to me... except for me. I should have been up $500 today with micros but ended about break even. So much whipsaw! (Today) WOW. Major tankage. I was up over $200 today, but then was faked out. I ended down for the day. Waiting for the AMP statement. I hope you all did okay or at least ended at Break Even.
Nice bounce off the overnight low, low, low (wow). I am almost back to my Friday balance of $3,523. As you might have guessed, my 20 tick stop was sliced through multiple times in the last two days until I expanded it to 40, and that brings with it its own really huge problems. Of course, I was looking for an "oversold bounce." I don't feel like posting all my failures of the last two days. And I am sure that I have LOTS of company in this. I think there are a LOT of extremely unhappy bulls right now. Good thing I am not one. I am an opportunistic trader with a bearish bent who really messed up not shorting this thing the whole way down. Here is the current balance in my account. Notice the world clock matches the "Latest Update" time. Biggest multi-day drop in the history of the ES? I believe it!!! Overdone? Who knows. Was the virus just an excuse for a drop? Probably. I think Sanders taking the lead in the Dems race is a factor too, since Wall street believes he would slow the economy.
The latest explanation I read for the waterfall decline is that the BANKS have billions of $ in derivatives that are starting to go sour. This was a big catalyst in the 2008 recession. I guess they didn't learn their lesson...
The velocity of the auction on the DOM for NQ is blinding fast. Has this impacted your approach at all? It has for me; it's too fast so I have to use market orders for entry and exit and stopped having an automatic stop loss set with entry. Sometimes for good and sometimes for ill.
CRAAAAZZZEEEY days this week, that's for sure. I didn't catch the short on the biggest one day point drop in history -- yesterday -- infamously losing 137 S&P points. This is from Wickipedia: FYI, the biggest one day percent drop was 20% in 1987. (Imagine that...) We got a nice bottom today, but the big boys tried to shake everyone out with another mid-day plunge. Then we got the rocket ship to the moon. What caused the late-day rally? Was it because the CDC unveiled new corona virus test kits? Was it just because everyone is tired of shorting? Did the FED promise away all the taxpayers' money again? I couldn't find the obvious news. I am so happy this week is over. I hope you survived. Two people I talked to this week got margin calls, but probably 70% of the traders did... So don't beat yourself up. It was a black swan. Yes, it may not be over, but I think the worst of it is. Jump back in and trade just one or two micros for a bit if your confidence is shot. You will be back on top in no time! I mentioned earlier that I widened my stop this week, but it is time to reign it back in to 40 ticks per MYM or MNQ. That is $20 per micro contract. If the market gets back to "normal," I may even go for a tighter stop still. I used to trade with a 20 tick stop on the YM and NQ. That is $100 per E-mini. I have even used at 10 tick stop before. The nice thing about a 10 tick stop is that when you are wrong, you are out fast. And it forces you to better evaluate every single entry. With the help of a friend, I have been experimenting this week with the MES - with the idea of graduating to the ES sooner than later - and ditching the MYM/YM and MNQ/NQ. But I am undecided. It seems like I am finally making some progress, and I really like them. So I am not sure what I will do. Still thinking. The NQ is beyond nuts now, and even with my upgraded Internet (1000 Mbps down and 40 Mbps up as of last night) my orders seemed SO SLOW in this fast moving market. My rationale for not trading the ES in the past has been because it has been too slow. Well Dorothy, "your not in Kansas any more!" The ES is on fire too, and it might work just fine for me. I know most people trade the ES, so I would be in good company. By the way, going forward, I will be posting much LESS here on ET. I really need to focus, and my friend also observed that I am spread way too thin... Unfortunately, I couldn't disagree with him; he was right. So this will probably be my last long post. I have so much to do, and I know I make trading errors because of the hectic pace I keep and the lack of focus. It will also help if I just trade two hours each day (like I said in one of my first posts.) Let's see what next week brings.
I had to do limit orders today on both ends today on the MNQ it was moving so fast. I did a market order entry and exit, and my loss was huge. I almost stopped trading because of the speed, but with the limit order I did okay.
i always use limit and stop-limit orders for entry. occasionally my stop-limits will get jumped and not fill but most of the time they do. of course stop-loss is always market order.