Quote from azukar:
You gotta be kidding me. This guy makes a "call" and the S&P moves 60 points against it, then rebounds to hit a 30 point objective. Then he's called on it and says, oh, I used options. And you think this is credible?
Is it any wonder the liquidity pool is never at any risk of a declining membership.
First of all, I'm not trying to be argumentive with you because you do have a valid point about 60 point retracement prior to the 30 point reward being reached.
Secondly, all he did was point out a
market tendency via generalistic concept without any trade management info.
Thus, we are required to do our own research to determine how to trade the tendency.
To support my statement about the
generalistic concept...
He then said the following.
Quote from jasonjm:
its just information, do as you please with it
With that said, he may not trade the way of a 60 point risk and a 30 point reward because I sure don't.
Many successful traders will take Long and Short positions until the tendency has completed - 30 point objective.
Further, I know a few traders that exclusively trade market seasonal tendencies (they make a good living) and they do not trade the tendency one direction as explained below.
For example, using jasonjm market tendency and using the Trading Hammer's - revisited thread about Hammer patterns.
http://www.elitetrader.com/vb/showthread.php?s=&threadid=52880
The following quick stats would have been generated within that market tendency via how I would have personally traded it.
(Although this is hindsight analysis...it has merits because the Trading Hammer's -revisited thread was written prior to jasonjm discussion of this tendency).
Here's an example of my trading approach for trading ES market tendencies.
Exchange Traded Fund SPY generates the Hammer trader signals in ES Emini Futures and managing the trade via ES only after the position entry via the 15min chart:
July 31st - Bearish Dark Inverted Hammer pattern
ES Short @ 1045am est (1485.50)
August 1st -
Cover Short @ 1000am est (1457.75)
Result = +27.75 ES points
August 6th - Bullish White Hammer pattern
ES Long @ 1000am est (1445.50)
August 8th -
Exit Long @ 1030am est (1497.00)
Result = +51.50 ES points
Total Points during Market Tendency
Result = +79.25 ES points
All exits were done
only when price traded through the range of the key trading day of the VIX tendency that got confirmed on July 27th Friday.
Why?
The key trading day that confirmed the tendency is now active becomes a
s/r zone because it is a key price action.
My point with the above, when trading market seasonal tendencies you are trading the price action (Long or Short) until the tendency completes.
If the tendency is Bullish...
Use position size management to control your risk exposure.
Normal to large size position on Long positions while small size position only for Short positions.
If the tendency is Bearish...
Use position size management to control your risk exposure.
Normal to large size position on Short positions while small size position only for Long positions.
Knowing the above statements about position size mangaement...
You can now go an adjust the above ES trade results via what you consider to be a small size position and a normal to large size position.
Once again, jasonjm did say do as you please and that's how I normally trade market seasonal tendencies.
However, in reality, I would have never taken that trade until I had my own chance to do my own statistical analysis via my personal trading approach.
Simply, there's much more to it than just a 60 point retracements and a 30 point objective.
Thanks jasonjm and I will do further research on your tendency because market seasonal tendencies are key aspects of my swing trading and position trading even though I only discuss day trading at EliteTrader.com
If the tendency has merits via my personal approach to trading...
I will trade it the next time it appears.
Mark
(a.k.a.
NihabaAshi) Japanese Candlestick term
