Tuesday, March 20, 2007

March 20 Trade Summary

Well today I was trying out a mean reversion strategy. It didn't work too well, given the trending we had most the day and the lack of volatility in the bonds. I entered too soon on my initial YM trade, but found the better entry on ER2 for a short reversal, and decided to scale into my ER2 short. I looked for 2pts on ER2, on got close to that by scaling out on the way down. I should have exited my YM short trade when I covered my ER2 short, however, I was greedy, and it ended up getting me later in the day.
I added to my YM short on the 12pm pop, looking for a reversal. I got 5pts, but it didn't retrace to my target. I ended up getting stuck in the trade and watched scared shorts cover YM to new highs for the day. I coverd my short right before YM closed for trading today and took a loss. I would have made 2x as much money today if I wasn't so greedy and took a small loss on my YM trade.

Bad things today:
1.Didn't trade the wave.
2.Didn't take partial profits on YM on my scalp.
3.Failed to accept that the trend had changed because I was greedy and wanted my YM position to turn positive.

Good things today:
1.Added to ER2 short when the signal became clear, and exited when the signal was clear.
2.Traded ZF for the first time and exited at the correct time.

Market observations:
1.I was actually watching Time and Sales when ER2 hit around my target of 796, and saw a huge wave of buying at 796.2, giving me the sign that shorts were covering. I was a little late to join the crowd, but still got out at a decent price.
The bonds and JPY have been pretty lack luster this week, and haven't gave me signals quite as strong as last week. I've heard that my strategy of trading the inverse realtionship between the bonds and stock indices only works sometimes. You can see the inverse relationship much better when there is news and high emotions. I'm guessing things will be very volatile tommorow and the signals will be better.

I'm not sure if I'm trading tommorow or not. In the past I have sucked becuase the volatility can be too great for me to handle and I'm still not very good at taking my stops, so there is potential that I will have a big blow up day. Also, my computer has been running really slow these last few days, having my charts freeze for a few minutes at times. My computer's speed may be due to overloading my hard drive with all the videos I've been recording lately. I may just record tommorows trading action and go and enjoy the weather outside.

Good luck to all those brave enough to trade tommorow!


jekadril on 3:42 PM said...


Let me just give you frendly advice.

First, you have to use stops. You have to have exit strategy, without it you will have a lot of small positive days and one big negative day which will whipe your acount.

Second, You are entering the trades against the main trend. Today it was up day, with higher highs whole morning. To short this kind of market without stop is very dangerous.

wish you good trading

HPT on 7:49 PM said...

Thanks for the advice Jekadril.
I did screw up today, and I'm mad I didn't use an initial stop on my YM trade. With more experience I will get better at taking small losses. I should have made 2x as much money today, but I failed to get into the wave. I notice the problem lies in looking at my P/L.

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