Wednesday, July 18, 2007

July 18 Trade Summary $1k on 57c

I'm expecting ER2 to outperform YM for the next week and to see some sector rotation.
DIA calls should have been closed at the beginning of the week if you were smart about taking your profits with option expiration quickly approaching.

P/L= $1k on 57 contracts and 400 shares

Trade Summary-
I traded 2 hours during the afternoon with objectives to look for short trades on YM and long scalps on ER2.

Trade experiment-
I put on a trade on my simulator account over a month ago.
Long 1 contract YM
Short 1 contract ER2

The results-
YM- $1,760
ER2- $222

You would think I should have gone long 2 contracts on YM to equal 1 contract on ER2, but still, YM strongly outperformed ER2 this last month, while ER2 is breakeven/lower from where it was a month ago.

My strategy has now reversed and I will be reversing positions for the next few weeks to see how things work out.


BH_Trade on 10:19 AM said...

I do tend to agree that R2k vs Dow relationship has gotten out of whack.

That said, I can't see how that view helps at all in your daytrading. That trade should be more for market neutral mean reversion types and not even come into play as far as your scalping style.

HPT on 1:21 PM said...

you are right,
I see the YM/ER2 relationship as more of a market neutral strategy Hedgies are playing for swing trades. However, sometimes this helps me realize I should be looking to take longs more so on YM as opposed to ER2 on range bound days (vice versa for short trades).

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