From the get-go 2016 started strong for the Bears. Shockingly strong in fact.
A breakaway gap down into 8 day 1500pt freefall.
At the same time, crude oil plummets around 20%
The move was so strong, there was so much carnage, the fragile ecosystem has gone haywire.
There is mass confusion. I am a bit unsure of what to do myself.
I didn't catch the entire move, I covered my shorts a little early because I had made so much money that I thought some sort of bounce was inevitable. Well, timing the bottom has been tricky and I took a few small losses that I was able to salvage with quickly adjusted short profits.
Whenever I make alot of money in a short period of time, I start getting fearful because in the past a big drawdown was sure to come in the near future. I had been trading cautiously the past couple days & had closed out many positions entirely because of this & even though I was missing moves in commodities, I knew it was right to be safe.
Unfortunately, it was today when I finally lost discipline & took my first drawdown of the year. Basically what happened was when the market broke below break-even, it started acting like it was about to crash. VIX, Gold, & Yen were all spiking and the lows were giving out. I put on sizable short positions because I thought a crash was imminent. It did in fact go lower but unfortunately I did not take profits. It takes out the previous lows, & then suddenly stops on a dime and begins whipsawing higher & next thing you know I am underwater on positions that were much bigger than the maximum my account can comfortably swing. So Basically I gave back a half of a week of profits.
This just goes to show you how viscous & unpredictable this market is right now. I knew a snap-back rally was likely & I should likely stay away this week but got suckered in anyways. I need to learn to get better about staying away from, avoiding the market. You don't need to be trying to game it all of the time & really shouldn't. It is appropriate to wait for high quality R/R setups. It is always worth the wait so you don't end up getting whipsawed like I did today.
I kind of wish I didn't close out all my positions last friday because now I have to pick a spot to get back in. However, I did do a good thing by securing & transferring some profits from my brokerage into a different account.
Anyways, I can afford to lose discipline once this year, but never again!
Focus on Position Sizing. Never Exceed Limit.
Focus on Patience. Wait for the high quality R/R setup. It Will present itself if you wait long enough for it.
Do Not be Tempted, Do Not Chase Price. This market is deadly right now, the whipsaws are ferocious!
My primary goal this year is to not give back money to foolish amateur errors.
It is important to be a focused, disciplined, trading machine.
Use proper position sizing, wait for the weak bounce that fails & then short this market into the abyss.
A breakaway gap down into 8 day 1500pt freefall.
At the same time, crude oil plummets around 20%
The move was so strong, there was so much carnage, the fragile ecosystem has gone haywire.
There is mass confusion. I am a bit unsure of what to do myself.
I didn't catch the entire move, I covered my shorts a little early because I had made so much money that I thought some sort of bounce was inevitable. Well, timing the bottom has been tricky and I took a few small losses that I was able to salvage with quickly adjusted short profits.
Whenever I make alot of money in a short period of time, I start getting fearful because in the past a big drawdown was sure to come in the near future. I had been trading cautiously the past couple days & had closed out many positions entirely because of this & even though I was missing moves in commodities, I knew it was right to be safe.
Unfortunately, it was today when I finally lost discipline & took my first drawdown of the year. Basically what happened was when the market broke below break-even, it started acting like it was about to crash. VIX, Gold, & Yen were all spiking and the lows were giving out. I put on sizable short positions because I thought a crash was imminent. It did in fact go lower but unfortunately I did not take profits. It takes out the previous lows, & then suddenly stops on a dime and begins whipsawing higher & next thing you know I am underwater on positions that were much bigger than the maximum my account can comfortably swing. So Basically I gave back a half of a week of profits.
This just goes to show you how viscous & unpredictable this market is right now. I knew a snap-back rally was likely & I should likely stay away this week but got suckered in anyways. I need to learn to get better about staying away from, avoiding the market. You don't need to be trying to game it all of the time & really shouldn't. It is appropriate to wait for high quality R/R setups. It is always worth the wait so you don't end up getting whipsawed like I did today.
I kind of wish I didn't close out all my positions last friday because now I have to pick a spot to get back in. However, I did do a good thing by securing & transferring some profits from my brokerage into a different account.
Anyways, I can afford to lose discipline once this year, but never again!
Focus on Position Sizing. Never Exceed Limit.
Focus on Patience. Wait for the high quality R/R setup. It Will present itself if you wait long enough for it.
Do Not be Tempted, Do Not Chase Price. This market is deadly right now, the whipsaws are ferocious!
My primary goal this year is to not give back money to foolish amateur errors.
It is important to be a focused, disciplined, trading machine.
Use proper position sizing, wait for the weak bounce that fails & then short this market into the abyss.
I think price could potentially bounce as high as 1970 but it could just as easily flag out & crash.
Everything is crashing but is it due for a bounce? If at all, how high does it go before inevitably rolling over & heading south...
update: This is my strategy at spx 1950. I will start small shorting -1ES & will add to my position every 10pts higher.
This market is going much lower and it is best to swing trade it with small positions rather than attempt to day trade this insane algo chop.
This market is going much lower and it is best to swing trade it with small positions rather than attempt to day trade this insane algo chop.
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