I moved my post here, to public forum as I don't see any reason for not doing so, on contrary.
Hi traders, how are you doing.
I'm ready to sit down and do analysis of my performance of past week but before I do that I think it will be beneficial to write down some notes before my mind will change memories - beneficial for myself and, maybe, for other traders.
We had a heck of the week.
There was no action price warning that Kevin observed in the past. We had only small gap down and then 3 flat days (around 2825 on the graph). On other hand Niel's indicator – decrease in contango in /ES between front and back month did work.
So, after that it started: we had big down day when SPX dropped about 50 points on average volume. It was steady drive down, without panic day.
I welcomed this drop with a smile and wanted more.
Next day opened gap down, rose a bit and dropped bigly on elevated volume. There was a sense that something unusual is going on. I don't trade volatility products and learned only after about XIV debacle. I read about it and have opinion but my main focus was on my positions.
They were fine, they were where I was comfortable. Vol spike did some damage to core positions but hedges did the job and I was actually up money.
I put on some small experimental trades that day – BWB style.
Then we had big up-candle day. I don't recollect that day except I was little worry that we may have V-bottom.
Next day opened with gap up. I was skeptical, was expecting move down toward 200 DMA.
Next day. I listened to some opinions and my expectation turned slightly bullish, even after seeing previous day ended in 'shooting star' style candle (not exactly but kind-off). Then day turned down for over 100 point fall. That was interesting.
I remember that after watching price action I thought that that was it, that we reached local bottom, from there we will go up for few days.
From that day strongest feeling I remember is disappointment. I started little of daytrading in /ES futures. I started unprepared but couldn't resist market actions. I had to leave platform in last hour when we have that push down. Such an opportunity wasted!
Note: this last push down was expected. To my limited knowledge it was strictly mechanical thing caused by all leveraged ETFs. Anyway I thought we are temporarily exhausted to downside.
Now last Friday. Most emotional day for me. To this point I removed hedges and was little vulnerable to downside. And we have strong push down almost all day long. I did not believed in that move despite my previous expectations of 200DMA (I suspect that this move was simple taking advantage of situation by short holders) but I don't trade my believes and I had to do something. My positions were not in 'the' bad shape but another 100 points move down and another vol spike would hurt. I'd rather do something. I bought some expensive puts. Later after reversal I managed to switch them for CCS – was it a good move? - I'm not sure.
Anyway we end up with hammer, or hammer like candle.
As my core positions, it is PM account, I started with small, about 6K, margin, as for today my margin is 70K. It is not worrisome just my constant attention is now required. I expect move up somewhere to above middle of Thu candle with possibility of very strong move up. Same time I have to be ready for another leg down. All that time my RegT margin stayed greater than my NetLiq.
Overall I'm few K down mostly due to vol spike. My current position is sort-of ok, but I'm not very comfortable with it due to lack of proper hedges. It reminds too much IC graph – I don't like it. If we move up I will try to put hedges back on, if not I do other things, probably locking in loss.
- do not listen to others opinions. Like TA, they may be right or wrong.
- do more research on hedges (I found out few days ago about Kennedy Hedge and want to take a closer look to see if it really is what I think it is
- learn more – I feel that I lost quite few opportunities to make fast gains due to lack of confidence.
- work on my own platform or find ready one. I like TOS but I don't trust it's greeks, especially on PM. Usually I don't relay on them in trading but last Fri I made some decisions based on what TOS showed. I knew that they were not accurate just didn't have time to fire up my tools and mess up there – my mind was not at all for that. So I need to put up some simple script that constantly displays better greeks (and maybe better graph) on my screen, script that doesn't need my attention to operate properly.
That's it for now - some notes by fresh PM trader. I did few trades around my core positions and now it is time to analyze them in more details.
I'm interested in other experiences.
Matt Williamson’s intellectual property is being resold I am sure with out Matt’s consent.