Hi Awash,
Be very careful in attempting to copy a few guys trade methdology own your own or without close supervision from the trader your trying to simulate...
Remember that warning I on occassion will post via adding (no pun intended) some humor into the situation???
Parental Guidance Alert: Do not attempt ***** scale in method...adding to a loser...(he's eventually profitable on the trades while most traders aren't) unless you have parental consent.
To finish a discussion we were having in the room about the psychological barriers of adding to a profitable position in comparison to adding to a losing position...
We really need to understand a bigger picture instead of a small time frame on an intraday chart before attempting any kinds of adds or scaling into a profitable position or losing position (I don't recommend the latter for any newbie nor veteran trader...I've tried it myself and get burnt more often than not).
Yep...not only should you be trading from both sides of the coin (Long and Short)...
you should start documenting all the missed trade signals...times and type of position and where you most likely would have exited for a profit had you taken the trade...
to help overcome that tendency to trade from one side only.
By the way...trading one way only isn't always bad if your with the trend and then on the sidelines when that trend is going the other way.
Also...as your finding out...don't ignore those reversal signals while your still in a trade...
your obviously finding out about that important fact as they tend to eat away at the profits as the possible new trend begins going against your profitable position.
Last of all...because your using Market Breadth Indexes (VIX, TRIN, TICK or whatever)...don't ignore them especially during those parabolic surges or strong trends...
they provide tons of hints and will often tell you not to be Shorting a strong uptrend or those infamous creeper uptrends.
Thus, trade #5 and beyond worries me because by that time the VIX was already pushing down very hard and had verification via its 5eMA, 50eMA lines declining below a declining 200eMA line after the 5eMA & 50eMA line crossed below the 200eMA line...
Via the 1min chart interval for the VIX
5eMA and Price crosses below the 200eMA @ 2:23pm est (Hint: Be careful about Shorting)
50eMA line crosses below the 200eMA line @ 2:34pm est (Hint: No more Short positions)
At this time...after the last key crossover...Short positions are HIGH RISK.
Via the 1min chart interval for the NYSE TICK
The NYSE TICK after 2:23pm est was testing its 1000 level often while not testing it's 0 level...another sign that Short positions has more risk than Long positions.
(Note: Be careful about Shorting the TICK when it test the 1000 level...if it does test 1000 and not 1200. I myself use only one bearish candlestick pattern if I decide to Short while dependent upon the TICK for confirmation when its > 1000 < 1200...mainly in the a.m.)
In fact...the NYSE TICK didn't test its 0 level until around 3:45pm est.
The above was also something talked about in the room.
Best to be on the sidelines if your only willing to play the Short side of the coin during situations like this afternoon...
situations that are repetitive enough to develop a profitable trading plan for such.
NihabaAshi
