ES Journal Archive (2006 - 2008)
- Thread starter Buy1Sell2
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Quote from romik:
wicked stuff there Sosa
Volume, Vix and patience are my edge. No need for hesitation on these type of days. Just take your stop loss if wrong. No need to hedge. When vix low volume low, I use no stop losses. Example last Friday, I had no stop loss on ES. I hedged with Ym (long). I shorted resistance and it didnt work (had gain but got greedy), but volume too low for me too justify covering for loss. lnstead I buffered it with a long. My goal that day was to break even and I did. This week is the fruits of being able to stay green with my trading style and capitalize when need be. Last 3 days
Digging thru a prior post here. The hedge last Friday to protect my short was jumping long on YM. Think of it as a crutch. 10 points on the ym contract is 50 dollars. One point on the ES is 50 dollars. My hedge comes in when they keep breaking thru resistance constantly. When the market does trend up 10 dow points is roughly one sp point. This makes it roughly the same risk/reward. 1:1 ratio. That Ym long saved me from short pains, and now you are seeing the profitable side. I'm sure this is what hedge funds do, but on a much grander scale.
Nothing really to do with the range, just that in an up trend the 10 dow points equate to 1 sp point. It locks in the maximum you can lose when you enter the other side. Why not lock in? I was in at near 6 year his which is good enough for me to justify an entry. Like I said the entry worked but I got greedy on the short side. My system allows me to be wrong with the understanding that I can still capitalize on the Long side if need be. Its a crutch, preventing me from falling and taking a nasty spill. This also keeps my transaction costs lower. In this market, I believe you need a back up or its too scary. This is just my experience.
I have to say here sosa, that I must disagree without being disagreeable. This is in relation to the hedge. I think that it limits losses, but also limits the gains. I just think a smaller position size is the way to go and not hold up the gains that will happen when a good trade comes in. Also, I think it's too much work and as well, it is my belief that the equity markets, intraday anyway, are not nearly as deserving a hedge as many other markets. Equity markets are not generally very trendy and they revert to the mean more than most other markets.
Trust me, I rarely and I mean rarely go long. I agree hedging limits gains, but also losses too. Last Friday was just an exception, as I dont know how to read longs accurately. And yes the equity markets rarely trend nowadays which is why I hardly never feel the need to hedge. In fact it was my first long trade of the year. :eek:
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