Tuesday, April 8, 2014

TIGHT Action

Just look at how TIGHT my stops were today! I think I'm getting a lot better at placing stops these days. Or maybe I'm just lucky, or it's a combination of both.

As usual, I was playing the short side today. I loaded into IWM, SPY and QQQ shorts and I was almost massacred by the QQQ spike you see there.

The IWM and SPY were much more well behaved, leading me to believe that the QQQ is quite overdone, and I should be looking towards either the IWM or the SPY to load up on more shorts.

I've been incrementally lightening up my risk appetite when the charts goes against me, but I usually cover at breakeven points, while I let my positions with a better entry run longer. A kind of psychological buffer zone for myself, even though I know it's technically the same thing. I don't lose much, but I also don't win as much. Leveraged is a double edged sword, and it's not easy playing it right.

I've already set all my stop losses for the night, so I'm going to sleep easy knowing that I made some pretty good returns on my short bets so far. I'm looking for a night clean exit indications for the rest of my currency trades so that I can just focus on the indices shorts.

I will try to keep my stops tight enough that I get stopped out in the relief and final failing fake rally, but loose enough that I can slowly digest any downside as the market slips. What do I think? Fake rally will be due soon, followed by a nice slow and grinding unwind of all the leveraged bets in the market until Q3 or as late as end of Q1 next year perhaps. Who knows, we shall see!

Put your stops up so you can sleep easy tonight, I know I will. Good night!

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