I'm trading SPY, not ES. I'm not using margin (yet) so there is no point where I have to take a loss. The next addition may require margin depending on how I go about doing it.
8/26: SPY -$31,749.00 hedge $3,938.25 Net for this trade -$27,810.75 (unrealized) +$1,223.60 (realized) +$2,931.69 (realized) +$1,129.72 (dividend) ------------------------ -$22,525.74 Back and forth back and forth in this range.
Yeah that would've been nice I have no idea where price is going so I never know when is the best time to close it. I can't call tops or bottoms nor can I predict direction. I actually thought about closing it the other day but I figured if I did that, price would just keep going down and I would've missed out on more and it would be like "oh man, if I hadn't closed it it would be +$20,000 now". So that's why I sometimes close only portions of it and sometimes re-add to it. Was there anything special about $6,000 or does that just seem like a cool number to close it out at?
Trading like this? None. I've only been doing this since the "crash" in 08-09, though. I've had big losses in the past when I would try to predict direction, though. And sometimes daytrading, too. Without checking my records, I think my biggest daytrading loss (ES) was probably around $4,000 in a single trade.
Was nothing special about the $6,000. I just saw a pretty decent upwards wedge forming, as I stated in my journal I saw more upside then downside. I really do like your idea of having hedges with the ability to close them out for profits during short term corrections like we are in right now. That said, I think I would have a more defined strategy of closing them out. You and I obviously both believe the market is heading higher, and we are both unsure as to when or how much. Since we both believe that, it could make sense to take profits on the hedge when it's even up only $1,000 or whatever. Basically, this probably sounds like a pretty useless post. And it probably is. Do you, or are you planning on, having any more of a business plan for the hedge in the future? EDIT: The other reason too is you had earlier mentioned you wish you closed the hedge when it was +5,000 and then it was only up like 4,000 and you missed the opportunity and then it was up 6,000, which is the main reason I brought it up in the first place.
Sorry, forgot to post an update yesterday. As of 8/29 close: SPY -$12,426.00 hedge $2,425.08 Net for this trade: -$10,000.92 (unrealized) +$1,223.60 (realized) +$2,931.69 (realized) +$1,129.72 (dividend) ------------------------ -$4,715.91
8/30: SPY -$10,602.00 hedge $2,284.32 Net for this trade: -$8,317.68 (unrealized) +$1,223.60 (realized) +$2,931.69 (realized) +$1,129.72 (dividend) ------------------------ -$3,032.67
8/31: SPY -$7,524.00 hedge $2,073.18 Net for this trade -$5,450.82 (unrealized) +$1,223.60 (realized) +$2,931.69 (realized) +$1,129.72 (dividend) ------------------------ -$165.81 If we're going to keep going up like this I should probably close out the rest of my hedge. Of course, I cannot predict price and have no idea if we're going to keep going up or not.