Well, evilmouse, if you stock guys would just keep buying yer fancy stocks, the indices will rise, and we all win!
Since you apparently have the resources to ride out these extreme drawdowns, what @volpri does at a micro level, you could do at a macro level.
What volpri does at any level is a bit too extreme for my tastes at this time. My biggest internal hassle is that sometime a couple years ago, I got so burnt out at staring at the charts all day every day that I couldn't do it any longer. I think it was during the Trump Twitter Trade War nonsense. What volpri does would require that again, and I am not back up to that level of tolerance on screen-time. And as far as I recall, volpri is using his techniques on the minis, not micros. So he is more macro than I!
He does it on minis and micros, but that's not the "micro" to which I was referring. He averages-in every few points of drawdown (micro), you could average-in every two hundred points (macro). So had you doubled-up at 4310, your average price would be 4410 and you would be ITM a hundred points sooner. Granted, if the market continued to fall, you would have to ride that out, too. And if the market fell another two hundred points, you would have the option to average in again. So not a lot of screen time involved. To do that, you would have to have an account large enough to handle whatever max drawdown you experience, and still have enough left to easily cover the maintenance. $5k for each MES contract would cover a 600 point drawdown, plus maintenance, with $900 left over as a buffer. And, yes, a black swan event, like the pandemic selloff last year, or a bear market, would definitely hurt, unless you had the resources to ride it out. Your style of trading, or more like investing, got me thinking about this.
Ahh, I see what you mean. A macro view of the market. Unfortunately for me, I entered the MES and MYM trades with two contracts to start because I really thought we were just going to slowly melt higher. Normally I would have just gone in with 1 contract for that exact scenario...On a longer-term time frame I would be able to average in if the positions went south in a big way. But since I am in those trades with 2 at the start of it, I do not wish to try to average in with more considering the uncertainty which caused this 5% September drop in the first place. The market may drop another 5-15% from here, so that is the buffer I am maintaining. That was my thinking when I entered the MNQ with one contract a couple weeks ago. But on that I was able to give myself the extra dimension of time (March expiration) to let that one resolve itself. As time has gone on, and the markets keep on tanking, I have to consider how much of a drawdown I am comfortable with. Considering time allotted until expirations, view on the global economics and where we might wind up by First Notice Date in December, this is the max exposure I am willing to take at this time. I may take a hit on the December entries. If so, so be it. Buy, hold, roll (if necessary). Thank you for the thoughts onda. It helps to remind me of something I keep forgetting, about performance bonds. With AMP, they only matter for 5 bloody minutes, lol!
I'm confused. Your "edge" of longer dated contracts offers the ability to hodl for a bigger picture trade. It hasn't seemed to work out that way afaik, but. Umm... why isn't comfortable (and acceptable) risk known at the time a trade is put on? Could this be part of the reason why you frequently deal with biggish drawdowns? I'm curious, was there a place in time that you realized your position(s) were for whatever reasons, not right?
Barring the it's alive human touch to online life, our styles and methods are too different for a Skype to have much value for either of us. That said, if you are unable to explain the risk-only component of any particular trade you take in a short paragraph at most, then there is almost certainly a lack of a plan, a lack of discipline, perhaps a bit of plain 'ol hope and pray wishful trading, or some combination of all of the above. Better trades ahead.
Yes. The moment the trade went one tick against me. So, how should I set my stop? At 1 tick below entry? 3? 5? 50? 500? 5000? There is no technically-correct stop level. Every position I have entered has been inherently wrong, because every position I have entered has gone red at some point in it's life. I have never ever ever seen a trade where it went up from the entry point without looking back. EVER. Again, I ask you...where the fuck should I place my stop? At what level does a trade go TRULY bad? Nobody has the answer man, because nobody can forward test the market, without forward testing it. See every year since 1901 or whatever.