Info!! When To Give-Up The Ghost A Trade

A few people lead keep asked me why I covered my swing merchandise (selling S&P 500 Index on Friday as well as adding to the seat Tuesday morning). Three reasons stand upward out:

1) I had gear upward an initial net turn a profit target at the weekly S1 level. We hitting that rate and, per my discipline, I e'er accept profits on 1 unit of measurement when the outset target is hit. (Note: this presumes a organisation for unit of measurement sizing of positions; I volition hold out blogging on this theme shortly. The basic see is that you lot carve upward your uppercase for a item see into several portions or units. This enables you lot to systematically scale inwards as well as out of trades.)

2) When I saw that nosotros were having a labored fourth dimension hitting the second, S2, target, I took the seat off entirely. My job organisation was that nosotros were seeing important selling pressure level (negative NYSE TICK, book at bid exceeding offering inwards the ES futures), but that the pressure level was having a hard fourth dimension moving stocks meaningfully lower inwards the afternoon.

3) I knew nosotros had a rigid momentum twenty-four hr catamenia to the downside. Recall that the proprietary Demand/Supply stair out is an index of the publish of stocks trading inwards a higher house as well as below the volatility envelopes surrounding their short-term moving averages. We hitting 200 on the Supply side, which agency that a real large publish of stocks had unopen below their short-term bands. This has precisely occurred xxx times since belatedly 2002 when I outset began collecting the data. When this has happened, the S&P 500 Index (SPY) has unopen upward the adjacent twenty-four hr catamenia 20 times, downwards x for an average gain of .60%. That told me that, short-term, I mightiness hold out able to re-enter my seat at improve prices. (Note: I update Demand as well as Supply every twenty-four hr catamenia earlier the marketplace opened upward via Twitter; trade management as well as its component subdivision inwards helping traders maximize gains, but also protect them.
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