I did go short again after the dow rallied to -100 and another one when the dow rallied to -70 or so. I was almost stopped out on my first one (4 pts) but the short covering rally faded as I had hoped. I picked up a net of another 2 pts (all my trades were winners up to that point).
Then, on the night session, I decided to wait to see how the asian markets would open before going short again. They were doing even worse than I expected as Korea was down another 6% tonight. I immediately went 1 s&p short and made a quick 4 pts before I decided to get out when I saw Hong Kong's drop slowing down (down 2.4% at the time).
I then lost two points by two very bad fills. The first getting in, and the other getting out. The s&p went up a point and I decided to go short again. I was filled almost a point lower and then I saw HK getting strong again, and I got out almost a point higher.
I learned something tonight. With Globex there is really no such thing as a market order. The order-taker keeps punching the current price into the computer. If someone accepts it as it is being punched in, it must be punched in again, and again until the operator is first to accept. Apparantly the operator had a lot of trouble both times.
In the future, with globex, I will put my price in one or two ticks above so that I have a better chance of not getting caught in the chasing game. I thought that was what the market orders accomplished. With globex, as you can see, it doesn't. I lost two pts on that trade. However, my net on the night session was an easy 2 pts. I worked much harder for the day :o)
Regarding the Rules I mentioned, one of the biggest is to USE THE EMOTIONS OF THE OTHER TRADERS TO YOUR ADVANTAGE. That means doing the opposite of the high/low end of the range. That also means no being unnecessarily spooked out of your position (assuming you have an educated assumption as to what way the market is generally heading). The end of today was a classic example. Instead of just bailing when the market was rebounding, I sold another one (mananging my position to some extent). I sold another because I was pretty sure I was just experiencing a big wave of buying (from short covering though at the time I wasn't sure).
Another rule: Don't keep buying/selling more and taking on that extra risk without placing an emergency stop order to sell. After I bought the second, I thought, If I'm right, 1 more point should be enough. This time it was. If it wasn't, I would have had a slightly down day.
Another rule: Don't let a good day turn into a loser. I was up a decent amount. If I didn't place the stop order, just in case, I could have had a down day (actually, slightly down isnt' bad).
Another rule: Don't be caught like a deer in the headlights of a car. Don't freeze. If it is going against you, your first loss will seem big until you keep holding it. Then you will wish you only lost that little. Place a stop, any out of the way stop, as an emergency.
Another Rule: Don't trade in crazy markets without experience (sounds like everyday, huh?). You might not have time to think properly, and the next thing you know you'll be down 6 pts or something.
Again, I'm constantly learning, so I may not always follow these rules myself. However, these are some of the principles I've somehow incorporated into my system of knowledge. I hope sharing these thoughts helps.
I must soon go to bed. I covered my last trade @ 960.80. It is now 963.20 (march s&p) so I'm glad I sold. Also, in markets which you are not sure, take the small, quick profit. That is what I did there.
HK is only down -.64 : japan is still showing weakness -1.50
S. Korea's quotes stopped on me for some reason. Last it was down 6.08 %
Take care !
Mike |
