Taking a lot of small losses, a high frequency of losses, is a reasonable explanation for traders developing the tendency to react emotionally and grab a quick (small) profit as soon as a trade goes green. Primarily driven by the fear of letting the trade turn into another loss. This fear trap kills R:R and along with it any chance of rising above the performance level of a breakeven trader.
ES Journal Archive (2006 - 2008)
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Taking a lot of small losses, a high frequency of losses, is a reasonable explanation for traders developing the tendency to react emotionally and grab a quick (small) profit as soon as a trade goes green. Primarily driven by the fear of letting the trade turn into another loss. This fear trap kills R:R and along with it any chance of rising above the performance level of a breakeven trader.
brother ben,
I agree about cutting losses, it only takes one time getting sloppy with money mgt. perhaps you can give an example of a complete system. I refer to the turtle rules as it is a complete system and free online. Money mgt. is more important than being
right, this is a hard lesson in the markets.
I agree about cutting losses, it only takes one time getting sloppy with money mgt. perhaps you can give an example of a complete system. I refer to the turtle rules as it is a complete system and free online. Money mgt. is more important than being
right, this is a hard lesson in the markets.
I have been working on the Fed statement all weekend. Got to get the wording just right. 
I expect a 25 bp cut in the fed funds rate with an attempt to apease markets by including language that expresses concern about economic weakness and will get the markets looking forward to more rate cuts in the future. The markets are happiest when they are looking for the next rate cut.
Right now the funds rate is 5.25 and the discount rate is 5.75. I could see a move to 5.00 in the funds rate and a 50 bp cut in the discount rate to 5.25. This would be an acknowledgment of the stress in the financial system by providing cheaper credit to institutions that need it the most. At the same time they (the Fed) could pretend that they are not throwing in the towel on inflation fighting by keeping the funds rate at 5.00 rather than slashing it 50 to 4.75. They are walking a bit of a tightrope here and that's how I see them resolving all the conflicting noise.
BTW, fed fund futures are predicting a 50 bp cut in the funds rate. That won't necessarily make it happen. I think many are delusional about what they expect from the Fed.
I expect a 25 bp cut in the fed funds rate with an attempt to apease markets by including language that expresses concern about economic weakness and will get the markets looking forward to more rate cuts in the future. The markets are happiest when they are looking for the next rate cut.
Right now the funds rate is 5.25 and the discount rate is 5.75. I could see a move to 5.00 in the funds rate and a 50 bp cut in the discount rate to 5.25. This would be an acknowledgment of the stress in the financial system by providing cheaper credit to institutions that need it the most. At the same time they (the Fed) could pretend that they are not throwing in the towel on inflation fighting by keeping the funds rate at 5.00 rather than slashing it 50 to 4.75. They are walking a bit of a tightrope here and that's how I see them resolving all the conflicting noise.
BTW, fed fund futures are predicting a 50 bp cut in the funds rate. That won't necessarily make it happen. I think many are delusional about what they expect from the Fed.
Quote from Jaxon:
I have been working on the Fed statement all weekend. Got to get the wording just right.
I expect a 25 bp cut in the fed funds rate with an attempt to apease markets by including language that expresses concern about economic weakness and will get the markets looking forward to more rate cuts in the future. The markets are happiest when they are looking for the next rate cut.
Right now the funds rate is 5.25 and the discount rate is 5.75. I could see a move to 5.00 in the funds rate and a 50 bp cut in the discount rate to 5.25. This would be an acknowledgment of the stress in the financial system by providing cheaper credit to institutions that need it the most. At the same time they (the Fed) could pretend that they are not throwing in the towel on inflation fighting by keeping the funds rate at 5.00 rather than slashing it 50 to 4.75. They are walking a bit of a tightrope here and that's how I see them resolving all the conflicting noise.
BTW, fed fund futures are predicting a 50 bp cut in the funds rate. That won't necessarily make it happen. I think many are delusional about what they expect from the Fed.
you nailed it, similar expectations.
1) gold tank
2) bonds rally
3) dollar rallies
4) stocks tank
5) oil tanks
6) lumber tanks
=)
here is one that works....es....10 min chart....10 simple moving average line trend is friend.........
"my gut is telling me, 1520 on FED day, and higher the days following it, with retests at 1500 even, till more conclusive evidence economy is falling out.
13800 on dow on FED day. If you look at daily charts, the downward trendy has already been broken, and 50 day MA is already breached.
all these long term indicators pointing higher."
or
"you nailed it, similar expectations.
1) gold tank
2) bonds rally
3) dollar rallies
4) stocks tank
5) oil tanks
6) lumber tanks"
Can you further explain? To me, these two statements seem to contradict each other, but I'm probably missing something? Just trying to understand.....
if you look at the YM ES charts 13800, 1520 is the closest daily resistance, I expect a 25 basis cut, you should see a initial spike, to close to those level, on ES 1510 plus minus 4 points, then spike back down to 1490 or so, then slow crawl back up to 1510 and ultimately the days following test resistance at 1520, but I don't anticipate we go any higher.
similar intraday patterns will appear in FX, and credit markets, correlating with equities intraday movements.
The trends that will appear will be gradualists trends in terms of macro implications. Bond market will rally, thinking Bernie will be behind the curve to test daily support at 112 on US, institutions have to paint a good picture for equities on FED day. So they can unload and distribute to the public, the initial bond spike will be down but the retrace wont be as much. Equities and bonds should hold inverse patterns intraday.
edit: the key point is at 1490 in ES, whether they can hold it, some rogue hedge funds could continue to try to break it, leading to equity carnage and bond rally....that just fuel for the rest of the day.
rogue hedge fund trade in red.
Thanks - it was the "stocks tank" in one statement and "13,800/1520" in the other that I mainly didn't understand.
I am new to trading and using ETFs while learning price action. I have kept a fairly equally amount of ETFs up (EWZ, FXI, DDM) and down (QID, DXD). I hold and take profits as the markets move in their favor and try to reposition at a better price during dips continuing to keep a balance while taking small profits. I've done this in an effort to be conservative while watching the DOW from open to close and to get a sense of how I react using real money.
I got overly long-term bearish on Wednesday and moved nearly everything to DXD unwisely. I should have rebalanced myself early Friday before the move back up. Now, I'm unsure whether to continue holding the positions until the market heads back down - whenever that may be, rebalance immediately Monday morning, or watch/"hope" for a dip on Monday to rebalance.
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