this is a great concept, patrick presents. a very workable method of trading the system yet protecting yourself from the drawdown i am experiencing now. bravo on a great post !
surfer
surfer
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harmonicpatrick,
Thanks for the education, but I think I am a bit confused.
Rather than put a hedge on at day 3 if the position is not going in your direction, why not just exit some or all of your position? Then, at the point where you have said that you reevaluate the hedge, and I assume potentially remove it, why not just reenter your original position?
There are other issues to consider along the lines of slippage, liquidity, transaction costs etc., but all those being equal, it is not clear to me why you put the hedge on and then potentially remove it versus just exiting some or all of the original position and then potentially reentering it?
Thanks in advance.
Thanks for the education, but I think I am a bit confused.
Rather than put a hedge on at day 3 if the position is not going in your direction, why not just exit some or all of your position? Then, at the point where you have said that you reevaluate the hedge, and I assume potentially remove it, why not just reenter your original position?
There are other issues to consider along the lines of slippage, liquidity, transaction costs etc., but all those being equal, it is not clear to me why you put the hedge on and then potentially remove it versus just exiting some or all of the original position and then potentially reentering it?
Thanks in advance.
A quick note;
When I being the hedge process on a directional swing trade based SOLEY on TIME ANALYSIS and the trade is working against me INITIALLY (and I have a few more weeks for TIME to expire)...
I have LEARNED to always always start it off and IF adding to it WHEN THE MARKET GOES YOUR DIRECTION on the initial position. I do not chase on the hedge.
This has been KEY for me and it has taken me a long time to STICK TO THAT TRADING RULE of mine. LOL Becase it can be so easy to OVERTRADE or MICRO MANAGE the swing position.
Patrick Q
When I being the hedge process on a directional swing trade based SOLEY on TIME ANALYSIS and the trade is working against me INITIALLY (and I have a few more weeks for TIME to expire)...
I have LEARNED to always always start it off and IF adding to it WHEN THE MARKET GOES YOUR DIRECTION on the initial position. I do not chase on the hedge.
This has been KEY for me and it has taken me a long time to STICK TO THAT TRADING RULE of mine. LOL Becase it can be so easy to OVERTRADE or MICRO MANAGE the swing position.
Patrick Q
Quote from Laoya:
marketsurfer, when are we bears going to get that pot of gold?
we have untill the 7th. paitence !
surfer
The responses follow:
"Rather than put a hedge on at day 3 if the position is not going in your direction, why not just exit some or all of your position?"
Swing trade was taken purely on TIME ANALYSIS and I am waiting for time to expire.
"Then, at the point where you have said that you reevaluate the hedge, and I assume potentially remove it, why not just reenter your original position?"
Becase when the hedge then is applied, I can actively TRADE the swing. What IF in your case the market moves up into the time period (for instance into Sept 9-17), and then continues going. With the hedge mentally I can think non-directional and simply then use TIME and PRICE to tell me the direction I want to go rather than purely TIME.
"There are other issues to consider along the lines of slippage, liquidity, transaction costs etc., but all those being equal, it is not clear to me why you put the hedge on and then potentially remove it versus just exiting some or all of the original position and then potentially reentering it?"
The cost of doing business for me, is cheap cheap cheap so I dont even think about this issue.
Keep in mind, this is only a specific instance with the following criteria:
1) Directional swing based on TIME only.
2) Trade goes against you initially.
The KEY for me - IS TO BE ABLE TO ACTIVELY TRADE, my position and let MY SKILLS as a trader be a part of my profit or loss, WHEN I TAKE A DIRECTIONAL TRADE BASED SOLEY ON TIME, and the MARKET goes against me into my TIME expiration. (In this instance in the market today - I have NO directional trade on at the moment. )
I dont take many directional swing trades, as I have 4 other trading strategies that I work with day in and day out. The directional swing trade is the 5th strategy but I play it 6-8 times a year and yes I will have 2-3 times of the 6-8 whereby I use a hedge.
Hope this helps,
Patrick Q
"Rather than put a hedge on at day 3 if the position is not going in your direction, why not just exit some or all of your position?"
Swing trade was taken purely on TIME ANALYSIS and I am waiting for time to expire.
"Then, at the point where you have said that you reevaluate the hedge, and I assume potentially remove it, why not just reenter your original position?"
Becase when the hedge then is applied, I can actively TRADE the swing. What IF in your case the market moves up into the time period (for instance into Sept 9-17), and then continues going. With the hedge mentally I can think non-directional and simply then use TIME and PRICE to tell me the direction I want to go rather than purely TIME.
"There are other issues to consider along the lines of slippage, liquidity, transaction costs etc., but all those being equal, it is not clear to me why you put the hedge on and then potentially remove it versus just exiting some or all of the original position and then potentially reentering it?"
The cost of doing business for me, is cheap cheap cheap so I dont even think about this issue.
Keep in mind, this is only a specific instance with the following criteria:
1) Directional swing based on TIME only.
2) Trade goes against you initially.
The KEY for me - IS TO BE ABLE TO ACTIVELY TRADE, my position and let MY SKILLS as a trader be a part of my profit or loss, WHEN I TAKE A DIRECTIONAL TRADE BASED SOLEY ON TIME, and the MARKET goes against me into my TIME expiration. (In this instance in the market today - I have NO directional trade on at the moment. )
I dont take many directional swing trades, as I have 4 other trading strategies that I work with day in and day out. The directional swing trade is the 5th strategy but I play it 6-8 times a year and yes I will have 2-3 times of the 6-8 whereby I use a hedge.
Hope this helps,
Patrick Q
Thanks. I think I get it. Probably doesn't work for me as well as for you. My trading skills aren't that great, so I don't know that a hedge that makes me insensitive to direction, and thereby rely more on my trading skills, does me a whole lot of good. But, I can appreciate what you are trying to accomplish by putting the hedge on.
Thanks,
rickd
Thanks,
rickd
just returned from surfing the biggest waves of my life. the hurricane (?) on the east coast stirred up some gnarly ones in north jersey, about 10-12 foot. it was intense , with a super strong rip tide----
on the 7th the stops are going on the dow short posiiton and back to the system i go--not to EVER deviate from again.
surfer
on the 7th the stops are going on the dow short posiiton and back to the system i go--not to EVER deviate from again.
surfer
DOW, NAZ, and S&P futures up.
Nikkei up 2% last night.
European stocks up today.
Nikkei up 50 points tonight.
Are "we" finally admitting that the trade failed?
Are you ready to "cycle" back to reality?
Nikkei up 2% last night.
European stocks up today.
Nikkei up 50 points tonight.
Are "we" finally admitting that the trade failed?
Are you ready to "cycle" back to reality?
Surf it doesn't look good for this trade. Except for a short headfake pullback there hasn't been any reason to stay short the Dow with a maximum short position that i can see since the bottom the first part of august.
Since you already stated it wasn't because of Arch Crawfords astro crash call maybe you will clue us in on what you were thinking if for no other reason than so others don't make the same mistake.
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