Wiggles and his other furry friends of distruction
Well, as Ryan so elequantly put. "Does this count as a 'good luck to lose money your first day' day again?" Unfortunately no, but in some ways yes. After a week off due to changes in software, clearing and actual location, this was my first day back in the market. Went down a little less than 2% today which isn't too bad, but the opportunity to make a great deal more 5% was there. Some of my trades today were good winners but there were a couple major mistakes I made today that I know now I shouldn't make again.
Background:
Today the market was coming into Nat Gas EIA. I woke up and observed the market from about 5 am until the close at 1:30. Nat Gas had a draw slightly larger than expected which as we all know from supply and demand class means that prices should go up. However the last time economics worked in the fast paced world of minute to minute (second to second even) trading I don't know. The market broke down about 20 cents from 5 am till around 10 am, when a huge rally up to the 8.00 psych mark ensued. The market finally came off its highs settle around 7.84. In total the market went up about 14 cents but really had a lot more going on other than that.
Trades:
Initially this morning the market was very thin and I knew that often, premarket, nat gas picked a direction and ran with it. Things were looking bearish so I put in a couple orders to sell pretty far outside the market, more as a referance point than anything...HOWEVER...the market in the morning makes HUGE 4 cent to 8 CENT jumps as big institutions (or whoever feels like buying 100 or more contracts) comes into the market. These orders got picked up on one of these jumps and I had to get out of them for about a 200 dollar loss. It was certainly a mistake to sit around during that craziness. My plan today was to use the MACD technical analysis tool on the 5 minute chart as a way of picking entry points. This paid off to put me up around 1% dollars going into the market open. I closed out my positions going into the EIA (by the way NEVER hold a position into EIA, that's so retarded risk wise I don't even no where to begin). The market tanked after the EIA and bottomed. The MACD went positive and I bought unfortunately this is where I made my mistake. I got a little greedy and tried to add onto my position as the market rallied. In doing so I increased my average price and failed to adequately adjust my stop loss. Due to this mistake i quickly went down about 1% dollars. I realized the error but not wanting to lose more than 2% felt I had very little risk left to put on. I decreased contract size and made a couple more losing trades to go down to 1.8%. I told myself that I should stop here and evaluate the market. I noticed that the MACD perfectly called the top of the rally and told myself just to watch. The market started to break and I gave into temptation and sold 1 contract only to find I pretty much picked the bottom of the break and stopped out at 2% down.
Negatives:
Placing orders in the early market is very risk with the HUGE jumps. Avoid this at all costs unless there is an indicator saying you should. Adding onto my position (getting greedy) was the worst of all ideas. It would've worked if I had trailed my stop loss tighter but I failed to adequately get myself out of the losing trade fast enough and got taken for a big loss, WAY above where I initially bought. Finally trading after I told myself to stop was a serious lack of discipline which cost about .25%. Avoid this foolishness at all costs. If you feel like you need to stop psychologically, stop, otherwise you face serious emotional risk (far greater than the financial risk you place yourself in).
Positives:
The 5 minute MACD is an awesome indicator. Someone playing just that could've nabbed about 30 cents of today's action if not more. This is a great way to find entry and exit points. Continue to use this wonderful tool. Good job also on not losing more than the amount I felt I could lose. Although it is difficult to take a loss the lessons learned will reap multiples upon what I lost, and I look forward to tommorows market to implement these improved strategies with full confidence.
Conclusion/Market Prediction:
Stay confident into tommorow. Look for the breakout above the 8.00 psych level, but this range bound market right now is perfect for not feeling bearish or bullish but feeling whatever everyone else at time is feeling.
Good luck and Namaste
Background:
Today the market was coming into Nat Gas EIA. I woke up and observed the market from about 5 am until the close at 1:30. Nat Gas had a draw slightly larger than expected which as we all know from supply and demand class means that prices should go up. However the last time economics worked in the fast paced world of minute to minute (second to second even) trading I don't know. The market broke down about 20 cents from 5 am till around 10 am, when a huge rally up to the 8.00 psych mark ensued. The market finally came off its highs settle around 7.84. In total the market went up about 14 cents but really had a lot more going on other than that.
Trades:
Initially this morning the market was very thin and I knew that often, premarket, nat gas picked a direction and ran with it. Things were looking bearish so I put in a couple orders to sell pretty far outside the market, more as a referance point than anything...HOWEVER...the market in the morning makes HUGE 4 cent to 8 CENT jumps as big institutions (or whoever feels like buying 100 or more contracts) comes into the market. These orders got picked up on one of these jumps and I had to get out of them for about a 200 dollar loss. It was certainly a mistake to sit around during that craziness. My plan today was to use the MACD technical analysis tool on the 5 minute chart as a way of picking entry points. This paid off to put me up around 1% dollars going into the market open. I closed out my positions going into the EIA (by the way NEVER hold a position into EIA, that's so retarded risk wise I don't even no where to begin). The market tanked after the EIA and bottomed. The MACD went positive and I bought unfortunately this is where I made my mistake. I got a little greedy and tried to add onto my position as the market rallied. In doing so I increased my average price and failed to adequately adjust my stop loss. Due to this mistake i quickly went down about 1% dollars. I realized the error but not wanting to lose more than 2% felt I had very little risk left to put on. I decreased contract size and made a couple more losing trades to go down to 1.8%. I told myself that I should stop here and evaluate the market. I noticed that the MACD perfectly called the top of the rally and told myself just to watch. The market started to break and I gave into temptation and sold 1 contract only to find I pretty much picked the bottom of the break and stopped out at 2% down.
Negatives:
Placing orders in the early market is very risk with the HUGE jumps. Avoid this at all costs unless there is an indicator saying you should. Adding onto my position (getting greedy) was the worst of all ideas. It would've worked if I had trailed my stop loss tighter but I failed to adequately get myself out of the losing trade fast enough and got taken for a big loss, WAY above where I initially bought. Finally trading after I told myself to stop was a serious lack of discipline which cost about .25%. Avoid this foolishness at all costs. If you feel like you need to stop psychologically, stop, otherwise you face serious emotional risk (far greater than the financial risk you place yourself in).
Positives:
The 5 minute MACD is an awesome indicator. Someone playing just that could've nabbed about 30 cents of today's action if not more. This is a great way to find entry and exit points. Continue to use this wonderful tool. Good job also on not losing more than the amount I felt I could lose. Although it is difficult to take a loss the lessons learned will reap multiples upon what I lost, and I look forward to tommorows market to implement these improved strategies with full confidence.
Conclusion/Market Prediction:
Stay confident into tommorow. Look for the breakout above the 8.00 psych level, but this range bound market right now is perfect for not feeling bearish or bullish but feeling whatever everyone else at time is feeling.
Good luck and Namaste
posted by Shiptastic at 1:56 PM
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