Fas/faz - 5/11
- Thread starter scot.mcpherson
- Start date
Do yourself a favor and don't hold the triples overnight. Just day trade 'em.
I took the long breakout of that beautiful NR7 (white) bar at 11:30. I'm holding until close.
I took the long breakout of that beautiful NR7 (white) bar at 11:30. I'm holding until close.
Keep in mind I am also new at trading, having had just over a month and lucky enough to still be in the black. I have had some lucky trades and some unlucky trades to offset what could have been great profits. Most of the time I loose money it was because I was stupid and entered a trade without having a way to get out. If you are in the same boat (less than $25k), then do NOT enter a position unless you have a daytrade waiting to exit the position. Too often a position that looks like it can't lose is the one you'll take without a daytrade left, and then you are stuck in a bad position.
Trading the triple etfs can be a joy if done right. There are a few guidelines you want to follow first though. Understand that the ETFs comprise a LOT of different stocks and track an index. In the case of FAS and FAZ they track the Russell 1000 Financial Services index. FAS tracks with, and FAZ tracks the inverse.
Learn the patterns of market, because the indices follow the market, not precisely, but roughly. They might have a bias for a day or time period where it looks like they aren't following, but they do over time follow the market overall.
There is a general pattern in the market, not hard fast rules, but guideline patterns. Mondays usually open down and continue down and sometimes tuesday follows suit sometimes and often tuesday is the best day to enter trades you plan on holding until the end of the week. The market usually grows through the rest of the week, and friday is often the week's high and often the best day to look for an exit to your position. If I were to bet on FAS or FAZ for a weekend hold it would usually be FAZ, it's not a "safe" bet, but it often works in your favor. Buy FAZ on friday near closing when the market is peaking, and sell it on monday. This week, people who held FAZ from friday until today made out with some crazy profits.
Again, that's not a rule, but it is a somewhat simplistic guide that you should use to "help" decide when is a good time to enter and leave. Just remember that's not all you need to know, it all just means you probably should have dropped FAS on Friday. I picked up fas today intending to hold it for a while. It'll have dips and peaks, but I think overall it will grow through the week. I am down by 30 cents right now, but it'll pick up. I need to get out of a daytraders mentality and hold on to swing trading only using day trades as exit hatches for when things go bad.
Trading the triple etfs can be a joy if done right. There are a few guidelines you want to follow first though. Understand that the ETFs comprise a LOT of different stocks and track an index. In the case of FAS and FAZ they track the Russell 1000 Financial Services index. FAS tracks with, and FAZ tracks the inverse.
Learn the patterns of market, because the indices follow the market, not precisely, but roughly. They might have a bias for a day or time period where it looks like they aren't following, but they do over time follow the market overall.
There is a general pattern in the market, not hard fast rules, but guideline patterns. Mondays usually open down and continue down and sometimes tuesday follows suit sometimes and often tuesday is the best day to enter trades you plan on holding until the end of the week. The market usually grows through the rest of the week, and friday is often the week's high and often the best day to look for an exit to your position. If I were to bet on FAS or FAZ for a weekend hold it would usually be FAZ, it's not a "safe" bet, but it often works in your favor. Buy FAZ on friday near closing when the market is peaking, and sell it on monday. This week, people who held FAZ from friday until today made out with some crazy profits.
Again, that's not a rule, but it is a somewhat simplistic guide that you should use to "help" decide when is a good time to enter and leave. Just remember that's not all you need to know, it all just means you probably should have dropped FAS on Friday. I picked up fas today intending to hold it for a while. It'll have dips and peaks, but I think overall it will grow through the week. I am down by 30 cents right now, but it'll pick up. I need to get out of a daytraders mentality and hold on to swing trading only using day trades as exit hatches for when things go bad.
Damn skippy.
I held FAZ cuz it was up good, and the long trend was up. And then I about crapped myself this morning when it came nearly down to my buy point. If I was smarter, I woulda sold eod yesterday, then rebought today. But most of the guys here don't have the account to day trade, so I think that's why they're making longer term comments.
But even given that, a guy has 10 daytrades available per month, and if you're good/conservative and just used profit targets of 3-5% per trade - easy to do with these instruments, IMHO - you'd make a decent monthly return with a little compounding.
This little retrace is troublesome though. I suspect that the S&P wants another look at 900, and we'll see what it does around that level.
Stopped out at -14 cents on FAZ long. My premise was wrong but it was a low risk trade.
Just watch, the market will tank now.
Just watch, the market will tank now.
The market does "seem" to always tell you that you're wrong, however you have to give it time. Every single time I have entered a trade, the market starts moving the other direction, but it always seems to come back for me if I am willing to wait it out.
Now don't get me wrong, if you position is tanking, get the hell out, I am just saying that in my case, I pick well and I need to learn more patience. I often enter too soon, panic and leave too soon locking in losses that i could have turned into profits if I only waited a little.
Again that doesn't mean let yourself tank....I am talking about my expereinces with my trading and dealing with my own fears.
Now don't get me wrong, if you position is tanking, get the hell out, I am just saying that in my case, I pick well and I need to learn more patience. I often enter too soon, panic and leave too soon locking in losses that i could have turned into profits if I only waited a little.
Again that doesn't mean let yourself tank....I am talking about my expereinces with my trading and dealing with my own fears.
That is great advice Scot, thanks a lot. I opened my Ameritrade account just to mess around, but it's grown on me like a bad habit. I'm utterly obsessed now and I think i'm not even focused at work as I used to anymore! What I really should do is pick up a good "day trading for dummies" book and give that a read. I'm sure that there are so many pitfalls that a new trader falls into (like the ones you mentioned above) which can easily be prevented.
Nice one.
Is is just me who did not sell FAZ at 5.80; and did not sell at 5.60 because my losses were higher; and again did not sell at 5.40 as my losses were even higher... and finally sold at 5.20 coz that looked like tanking?
Dude, trading is not easy. By the way, I did not sell any FAZ today and still holding my full lot.
I'd have sold FAZ a lot earlier, but as I said I tend to pull the trigger too soon. I am in FAS right now, got in too early as always, but didn't get out when I was screaming mad that I need to get out. I am now in the profit zone...just cause I held on for a few more hours.
Thing is, once you have a sort of bad position, then really you already have the best price..
Say you bought FAS at 9.90, like I did, and it fell to 9.08 like it did today. Well I already have it at 9.08, can't do any better than that can I? Well it's come back and traded as high as 10.30 since, so instead of locking in the loss, and hopping back on the train with LESS shares for less profit, I now have a 3% profit instead of a 9% loss.
I wouldn't do the same with FAZ, it tends to fall over time, when I trade FAZ I intend to hold it overnight only. I buy it in the afternoon close to the closing bell if the market is rising strongly to the close, and get out in the morning either right before or right after the morning bell and capture the gap. Even if I held FAZ over the weekend, the chances of me having held it through monday and then through this afternoon are probably close to zero.
The last few days have been extraordinary for FAZ...truly...look at the lifetime of FAZ and you'll see it has a downward trend. That might change now that FAZ is so low now, but until I see the change in character of FAZ for a bit longer, I am calling the last few days a lucky anomoly for those who got it at a good price.
Thing is, once you have a sort of bad position, then really you already have the best price..
Say you bought FAS at 9.90, like I did, and it fell to 9.08 like it did today. Well I already have it at 9.08, can't do any better than that can I? Well it's come back and traded as high as 10.30 since, so instead of locking in the loss, and hopping back on the train with LESS shares for less profit, I now have a 3% profit instead of a 9% loss.
I wouldn't do the same with FAZ, it tends to fall over time, when I trade FAZ I intend to hold it overnight only. I buy it in the afternoon close to the closing bell if the market is rising strongly to the close, and get out in the morning either right before or right after the morning bell and capture the gap. Even if I held FAZ over the weekend, the chances of me having held it through monday and then through this afternoon are probably close to zero.
The last few days have been extraordinary for FAZ...truly...look at the lifetime of FAZ and you'll see it has a downward trend. That might change now that FAZ is so low now, but until I see the change in character of FAZ for a bit longer, I am calling the last few days a lucky anomoly for those who got it at a good price.