1. If VIX is under 26, buy the dip. If VIX is over 26, sell the rip.
2. Always trade in the direction of the larger trend. Find the strongest trend in your time period.
3. Nothing as bearish as a failed breakout. Nothing as bullish as a failed break down.
4. Don't worry about the last dollar. Take your money and go to the beach!
5. No more than four positions at a time. Preferably 2-4. Scope out others. Pick the strongest.
6. Buy the strongest; sell (short) the weakest.
7. Nothing is guaranteed. Nothing.
Sunday, May 16, 2010
Market Overview
1. USD index appears to be at a ST top at 87.3 or so. It should fall to 85.4 or so, followed by another top should come around 87.3 - 87.5. This top should show divergences on daily RSI.
2. This should correspond with the EURO approximately as such: 1.2240 -- 1.2510 -- 1.2130.
3. Then EURO could rally for the rest of the summer to 1.3 or so.
Win, to reply to your post, I think tomorrow (5/18) will down. The reason is that we already got the near 35 point rally off the gap-fill. The wave down isn't complete.
Note the Euro predictions on Sunday, George: 1.2240 -1.2510 - 1.1130 (bottom)
Actual: 1.2230 - 1.2450 - 1.1140
IMHO, tomorrow will be up on the ES and EURO. Can't say for sure how much -- haven't done the work necessary -- but Weds-Thursday should be both up days. Perhaps highs on the EURUSD of 1.2330 (Weds) then 1.2570 (Thurs -Friday). Then back down to 1.2340 or so.
Here's how I screwed up today: I was long three units from 1.23 or so. I let loose one long futures unit at 1.242, but kept two others because I was so sure of my analysis. I added a third at 1.235. Well, I was right about the bounce but wrong about the number (which I didn't allow for). I didn't have time to watch, so this evening when I checked again, i was down 200 Pips on three contracts. Crazy day.
It shows me that I can't trade futures while not watching. On a day like today (which can happen), I can lose substantially. If I had been trading June or July options, I could wait it out and I would be fine. Futures contracts, however, are settled the same day, so you can't let them run like this unless you have capital for dozens of contracts. I'm putting this on a public forum, so I can change the way I trade. Starting tomorrow, I'm back to options.
Win it definitely looks like you are developing an edge for price movements and levels. That's great.
What's more important than an edge, however, is risk management. I believe more people fail at trading for lack of discipline than any other reason. It's damn hard.
So, keep up what you're doing and you can succeed.
6 comments:
Win, to reply to your post, I think tomorrow (5/18) will down. The reason is that we already got the near 35 point rally off the gap-fill. The wave down isn't complete.
to reply to your comment on my blog*
Note the Euro predictions on Sunday, George:
1.2240 -1.2510 - 1.1130 (bottom)
Actual:
1.2230 - 1.2450 - 1.1140
IMHO, tomorrow will be up on the ES and EURO. Can't say for sure how much -- haven't done the work necessary -- but Weds-Thursday should be both up days. Perhaps highs on the EURUSD of 1.2330 (Weds) then 1.2570 (Thurs -Friday). Then back down to 1.2340 or so.
Here's how I screwed up today: I was long three units from 1.23 or so. I let loose one long futures unit at 1.242, but kept two others because I was so sure of my analysis. I added a third at 1.235. Well, I was right about the bounce but wrong about the number (which I didn't allow for). I didn't have time to watch, so this evening when I checked again, i was down 200 Pips on three contracts. Crazy day.
It shows me that I can't trade futures while not watching. On a day like today (which can happen), I can lose substantially. If I had been trading June or July options, I could wait it out and I would be fine. Futures contracts, however, are settled the same day, so you can't let them run like this unless you have capital for dozens of contracts. I'm putting this on a public forum, so I can change the way I trade. Starting tomorrow, I'm back to options.
Win it definitely looks like you are developing an edge for price movements and levels. That's great.
What's more important than an edge, however, is risk management. I believe more people fail at trading for lack of discipline than any other reason. It's damn hard.
So, keep up what you're doing and you can succeed.
Thanks, George. You're absolutely correct. Hey, keep up the good work, and thanks for keeping on chipping in with thoughtful reminders.
You're welcome. All living traders have to remind themselves of these things constantly, I imagine.
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