ES Journal Archive (2011)

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Quote from JSHINV:

one of many rules for risk management not etched in stone but a conventional one risk more than 2.0 perent on any one trade and no greater than a 6.0 percent loss on your account for any one month. the rule: if you hit 6.0 percent loss stop for the month.
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You see, I don't agree with that rule. I'm certain I'm not the only one. Do you know the reason why?
 
There is nothing on the day chart that says long...but short term there are always entries but it should be treated as a short term trade




Quote from JSHINV:

I agree we are in a volatile market with the es which is what we wait for. i am not sure whatnthe vix will do. I think we will breach the neckline for a reversal, but I would not venture a guess when. could be tomorrow could be a few weeks. As Vol pointed there are a humungous open interest in puts at current price levels which could precipitate a short squeeze. i think LC thinks we will will touch 1300 again, I think he's looking at a gap fill ar some fib retracements (not sure). I think we are looking at a reversal. But hey what the hell it hasn't been confirmed yet ( I think it will be in the next week or sooner). point being you may be right. But you may not be. I may be right, but I may not be.
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Quote from klinckphilip:

There is nothing on the day chart that says long...but short term there are always entries but it should be treated as a short term trade
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agree.
 
Quote from iloveoptions:

I understand that you're not trying to be sarcastic. I'm more bullish now than I was early in the week, lol. I stated my bias on Sunday night that I've turned bearish on the market. I admitted of making several mistake, including not reversing. I wasn't expecting the downtrend to be that viscous, and move that much in just 2 days! But it did. Fortunately, I sized in slowly.

No I'm not trying to prove something, just attempting to catch a bounce that has yet to materialize. Then again, I haven't put on a full position in a long while. Tomorrow could be the day were I have on 25 positions. Yikes!!! 1 tick = $312.5 Crazy!

I tell you though, we are fortunate to be experiencing great volatility without much increase in the VIX.

I also forgot to mention that Sunday night closing of my long position from last Friday with a + 17.75, has helped cushion the draw down considerably, so the draw down is not as bad as it seems. However, I do treat every new structured position( initial + adds) as a new one. Thus, my draw down on this has been on the moderate side, but not severe...yet.
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So, based on your earlier post, you feel comfortable being long 25 lots on $125k captial, deep in the red, with the way this market is behaving? 12.5x leverage may not be too crazy in a calm market but the ES was down 30 handles in basically a straight line today! Odds are it bounces hard, but what if it doesn't? Are you gonna be able to dump the position when your account is down 20, 30, 40 % ? At that point most people will go into fuck-it mode, and it all becomes an all-or-nothing coin-flip.

Look whats going on. The debt-deal bounce failed miserably. All types of support was broken. Treasury yields are collapsing. Gold and CHF are going nuts. We have ADP, ISM non-manufacturing, and factory orders tomorrow. The fact that the vix was subdued is more worrying. People might be taking profit in their vol positions in front of numbers or they may be setting themselves up for a scramble to buy it back. Who knows?

Basically, do what you need to do. Just keep in mind, as you dig the hole deeper, it becomes harder and harder to get yourself out. Your rational mind doesn't work correctly in extreme situations, your limbic system takes over.

BTW, I hope we rally big tomorrow, snap-back rallies after a move like todays is some of the easiest money you can make. Good Luck.
 
Quote from iloveoptions:

You see, I don't agree with that rule. I'm certain I'm not the only one. Do you know the reason why?
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read it one of Elder's books. can't recall reasons, except I think some trading firms at the time the book was witten ( over 20 years ago), enforced that rule with their traders. may be dated now. But Jessie Livermore never followed a rule like that. he stuck by his convictions. I wish you the best in you best in your trading.
 
Quote from joneog:

So, based on your earlier post, you feel comfortable being long 25 lots on $125k captial, deep in the red, with the way this market is behaving? 12.5x leverage may not be too crazy in a calm market but the ES was down 30 handles in basically a straight line today! Odds are it bounces hard, but what if it doesn't? Are you gonna be able to dump the position when your account is down 20, 30, 40 % ? At that point most people will go into fuck-it mode, and it all becomes an all-or-nothing coin-flip.

Look whats going on. The debt-deal bounce failed miserably. All types of support was broken. Treasury yields are collapsing. Gold and CHF are going nuts. We have ADP, ISM non-manufacturing, and factory orders tomorrow. The fact that the vix was subdued is more worrying. People might be taking profit in their vol positions in front of numbers or they may be setting themselves up for a scramble to buy it back. Who knows?

Basically, do what you need to do. Just keep in mind, as you dig the hole deeper, it becomes harder and harder to get yourself out. Your rational mind doesn't work correctly in extreme situations, your limbic system takes over.

BTW, I hope we rally big tomorrow, snap-back rallies after a move like todays is some of the easiest money you can make. Good Luck.
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Thanks for reminding me of all the hazards I'm about to face tomorrow. At 1195 which is where my stop at the moment, and with no further adds, I'll be down 21,450, or -17.16% without counting the gains from Friday to Sunday trade. A lot indeed for one trade idea. It's a bet I'm currently willing to take and live with the consequences that come with it. If I fail, it will be a good reminder to never break rule 1 & 2.

The numbers tomorrow do concern me after what we've just witnessed from the the economy the last 2 days.
 
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