When the short interest is the lightest, that's when there'll be a bigger move down. Somehow I think a lot of shorts took profit this week, and I don't see a lot of retail or small PM's having the balls to short down here. So.... I tend to agree. Wherever the next big "V" comes in with volume confirmation, like a 1.75% "V".... that should mark the bottom going forward.
ES Journal - 2023/2024
- Thread starter Buy1Sell2
- Start date
Thank god you're not in the investment newsletter business. Imagine you telling your investors, "well, hmm, I can foresee the stock moving both up and down. We'll just have to wait and find out."
You're gonna love this one:
We can go sideways, too. LOL.
Joking aside, I'm just suggesting being wary of the idea that the market has to do this or that. Ultimately, the market's gonna do what the market's gonna do.
When the market broke out higher November last year I saw several people who was even bullish at that point, but which claimed erroneously that the market had to pullback first and kept shorting the initial few hundred points for a pullback that never came and ultimately missed the rally.
Right now, it's possible that the market's become too short short-term and I see a lot of bearish comments, so it does suggest we could see a rally instead next week. On the other hand, if this sell off get legs, it's quite possible we'll just keep going lower short term without much of a rebound.
The last time we saw a similar week in magnitude (% change) and structure was early 2022.
The following Monday printed the week low before closing the week with a green candle, but, that Monday first dropped 172.75 (!) points in RTH before rallying 197.25 points to close the day green.
Wow!
Most of the weeks in my sample eventually closed green, but quite a few saw a bit of a drop first (a few didn't).
And a few weeks simply kept selling, too. In 2018 the following week was down another 5 % without much counter-moves at all.
Basic plan for now:
Sell any rips in Globex for at least a dip below Monday's Low in RTH. HODL short for a big pay day if downside momentum picks up below Monday's Low in RTH.
The super bullish scenario would be if there's not much selling in Monday in RTH at all and we hold last week's low in RTH. It would probably still be a good sell on the day though.
The following Monday printed the week low before closing the week with a green candle, but, that Monday first dropped 172.75 (!) points in RTH before rallying 197.25 points to close the day green.
Wow!
Most of the weeks in my sample eventually closed green, but quite a few saw a bit of a drop first (a few didn't).
And a few weeks simply kept selling, too. In 2018 the following week was down another 5 % without much counter-moves at all.
Basic plan for now:
Sell any rips in Globex for at least a dip below Monday's Low in RTH. HODL short for a big pay day if downside momentum picks up below Monday's Low in RTH.
The super bullish scenario would be if there's not much selling in Monday in RTH at all and we hold last week's low in RTH. It would probably still be a good sell on the day though.
I feel many, many people are trading through these firms, they just aren't posting to ET.
I feel many here at ET may be sort of stuck in their thinking about these firms and the 90/10 split. Rather than think "heck no I don't want to give them 10% of my profits" the proper perspective is "I can't believe they assume all the risk and put up all the margin and I only have to pay them 10% of any profits, if I make any profits at all."
I am trading a funded account through Trade Day. Trading their funded account has made me a better trader of my own account. I did try Apex but after getting funded several times and then losing the funded account on profitable days due to their ridiculous live trailing drawdown rule I swore off prop firms for good. Imagine losing an account that is sitting on thousands of dollars of closed profits because you were attempting to let your profits run?
Then I found Trade Day. It is owned by a couple of guys who grew up in the 1980's-2010's British prop firm culture and model their online prop firm along those lines. It is very similar to how Navinder Sarao's prop firm is described in the book Flash Crash. You get one account, and your job is to trade it, protect it, and grow it. That suits me fine.
I have no experience with TopStep, but if @Laissez Faire is square with them I'd conclude that they are worth looking into as well.
I wonder how these firms work internally. For years we have had discussions here about them, and I think it was suggested that some were internalizing trades since they knew most traders would blow up.
I take it that the initial qualifying period is Sim, and then after you pass, your orders do hit the market. Since the drawdown metrics seem quite rigid from what is being posted by LF for example, they likely limit the total loss that they take on any trader to just a few thousand dollars. But even this is a large hit to their bottom line if all they are making is $100 or $200 from the fees to qualify. I wonder what the metrics are how often a trader does qualify, and then goes on to hit the max loss in just a few weeks once the trades go live.
On the flip side, they can't internalize the orders because if you're up $80k to $100k like LF and want a payout, there is no way that they want to take the hit on paying this out if those trades didn't actually hit the market and hence the firm collected these profits from the CME.
I guess for them its just a statistical play. Most traders will never qualify, and of those that qualify, most don't go on to hit the max loss without every making money for the firm. So there is likely only a 1-2% chance of the firm taking a $3-5k hit on a trader. So from 100 traders, 90 will likely pay $100-200 over and over again in fees to qualify, which they fail many times. 6 or 7 go on to be profitable and the firm likely makes 10% from these guys, and only maybe 2 to 3 guys end up losing a few thousand for the firm before they are cut off after qualifying but quickly hitting the max loss. So I guess the numbers perhaps do still add up very nicely, even if there is nothing shady going on in the background.
Hope everyone had a great weekend.
Anyone else looking forward to the week ahead?
Anyone else looking forward to the week ahead?