Today was a good trading day. The fund have lost some 2 and a half percent, but on perception that was still nice session in term of my analysis.
In short, I have entered short position w/ the bet of the market downside move on some 6 points from the level of my entry. In fact, the market exactly have dipped like I was forecasting. But before, there was the pullback, when my trade was fixed by stop loss order. And instead of fixing plus 6 percent, the fund get minus 2 and a half percent as of this trade. So what the hell was wrong?
Now probable answers are:
1) poor spread policy between stop loss order level and open price level;
2) poor issues of entry - I should wait for more valid reasons;
3) everything was OK - blame a hedge fund or a tough guy on a floor that have sparked that sudden upside move.
The reasons of the short position were:
1) $add was making lower low - but only one minute before ES have made this - poor forerunner, but here OK;
2) $vold have posted sharp downside move. Here it's not OK. Huge draw dawn was on 13:18 ET and the moment of the trade entry was 13:19 ET. Lets be honest, yes $vold weakness good reason but a trading is not watching in a crystal ball;
3) internals were in the trade favor - bearish according to $tick and $vold stats;
4) no recovery in the weakest sectors - not appropriate.
So lets go back to my proposed answers on the question about what have exactly caused the trade to bring the loss to the fund.
1) Spread policy between stop loss order level and open price level was not poor at all. The trade could avoid stop loss if that order would be placed 3.75 points above open price. That is tremendously huge spread in my supposition that can't allow the fund to have solid profits.
2) The reasons of the entry were not appropriate. That's the answer that is more closer to the truth than any one else. About $vold I have said already and $add was also not a valid reason. Internals issue, the only that have left, is a single matter of the entry, that can not be a worthy reason.
Want to emphasize, that on 13:19 ET - the time of the trade open and ES making lower low, respectively - the two weakest sectors during the session, materials (#XLB) and consumer discretionary (#XLY), were not making lower lows. That's the key point. Thats why there was a rebound, not cause of tough hedge fund. Weakest sectors just stop to be weak.
If I just wait for a while, it will be obvious, according to $add dynamic, that bulls were loosing ground. And what is more necessary, is that there was no rapid recovery in the weak sectors that have to be, if the market reversing to an upside.
All at all, the reason of today's loss is 2) poor issues of entry - I should wait for more valid reasons.
In short, I have entered short position w/ the bet of the market downside move on some 6 points from the level of my entry. In fact, the market exactly have dipped like I was forecasting. But before, there was the pullback, when my trade was fixed by stop loss order. And instead of fixing plus 6 percent, the fund get minus 2 and a half percent as of this trade. So what the hell was wrong?
Now probable answers are:
1) poor spread policy between stop loss order level and open price level;
2) poor issues of entry - I should wait for more valid reasons;
3) everything was OK - blame a hedge fund or a tough guy on a floor that have sparked that sudden upside move.
The reasons of the short position were:
1) $add was making lower low - but only one minute before ES have made this - poor forerunner, but here OK;
2) $vold have posted sharp downside move. Here it's not OK. Huge draw dawn was on 13:18 ET and the moment of the trade entry was 13:19 ET. Lets be honest, yes $vold weakness good reason but a trading is not watching in a crystal ball;
3) internals were in the trade favor - bearish according to $tick and $vold stats;
4) no recovery in the weakest sectors - not appropriate.
So lets go back to my proposed answers on the question about what have exactly caused the trade to bring the loss to the fund.
1) Spread policy between stop loss order level and open price level was not poor at all. The trade could avoid stop loss if that order would be placed 3.75 points above open price. That is tremendously huge spread in my supposition that can't allow the fund to have solid profits.
2) The reasons of the entry were not appropriate. That's the answer that is more closer to the truth than any one else. About $vold I have said already and $add was also not a valid reason. Internals issue, the only that have left, is a single matter of the entry, that can not be a worthy reason.
Want to emphasize, that on 13:19 ET - the time of the trade open and ES making lower low, respectively - the two weakest sectors during the session, materials (#XLB) and consumer discretionary (#XLY), were not making lower lows. That's the key point. Thats why there was a rebound, not cause of tough hedge fund. Weakest sectors just stop to be weak.
If I just wait for a while, it will be obvious, according to $add dynamic, that bulls were loosing ground. And what is more necessary, is that there was no rapid recovery in the weak sectors that have to be, if the market reversing to an upside.
All at all, the reason of today's loss is 2) poor issues of entry - I should wait for more valid reasons.
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