I tend to agree with this. I think the buy the fucking dip crowd gets rewarded fairly often, so they have a very good win rate. But every now and then, the market has to teach these guys a lesson as well. I can't say if this will happen tomorrow or not, but it certainly will, and even our resident only long traders will be starting new aliases after it all blows over.
Im not trying to torch the "Buy the dip" guys, ive been on that side alot, but i hate the people who think they have the golden ticket because "Buy the dip market only gaps up" is supposedly some new, viable, trading strategy..... market has to clean those guys out every once in a while, no better time than today, lol.
The anatomy of a trade. I feel like this is a big one, i usually only put out feelers pre market usually like 1-2 contracts at a time tops, but i felt like the tape was weak, i really thought we were going to break at the bottom originally, so i shorted just 3 contracts, my biggest mistake after the initial short was adding when it was through my level, so i took a bath, and chunked out at the top. I lost a bunch of money right off the bat. It was flat at this point, but The thing is i could see that we were holding at 2437, it kept on trying to get through the offer but offer kept absorbing and going down, look at the 2 min from earlier, 2437-2438 was roughly where i thought we might go up/break down, based on the channel but then it just kept holding kept holding, so i piled in on the way down when 2437 held, i thought we would break i maxed out my buying power on this. ANNNNNNND I was totally wrong, but unlike alot of times in the past, i said to myself im not going to get chopped up in the middle, im not going to punch regardless of how big i am, (Unless it gets through the top of my channel) Im going to allow the trade to work. Top of the channel held, so i piled in on the way down, i missed it by 1 roll, but now im getting paid, moral is, dont short change the stop outs, make it go to where it needs to go, i missed on getting stopped out for a big loser by a half a point but lots of times i get big like this, and i punch out in the middle of the move, cause im scared. Im short as shit right now, i stuck with it, i read it, i I stopped out when i was wrong, and i crushed it when i was right, cant say i got something this right in a long long time, i chopped my size big time when i got a chance but i got 5 left now, today is going to be a big day, YYYYYUGE.
I wanted to stop myself out so badly at the top, but i forced myself to allow it to go through the top, and allow my plan to go to fruition, this doesnt mean hold on forever, it just means make sure you let the stock stop you out, and you dont get cut up in the middle.
Im not trying to lead anyone off a cliff here, what im saying is, when i get aggressive i tend to get scared lately, and i tend to get chopped up in the middle. (I.E. i get stopped out before the top of the trade.) What im getting at is this, once you have commited size you need to look at the trade again and ask whether or not the risk rewards was right, if the risk reward was right when you started the trade, you need to hold on too the trade, and just let it happen, know your risk know your reward, and dont punch out in the middle, cause if you let all of your biggest positions chop you up in the middle you will die a slow death as a trader.
Im out btw, second best day all year, when the ES moves i crush it. Still looking for another down move to keep piling on.
I have mixed feelings. I believe the entire reason for the sell was the North Korea fears, which I don't think are going to turn in to anything. Now IMO the only reason for a further selloff would be the cascade of margin calls you mention(barring war of course). I actually expect the buy the dip trade to work quite nicely again, maybe after some more shakeout. I personally had a fantastic week thanks to the EFII chatter in this thread, and getting short my largest size of the year in tech on the 8th. I think the next play for slower traders like me is to pick what to buy...I'm looking pretty hard at SQ again due to the chatter here. I really like the company fundamentally from what I have learned so far. I'm looking at buying it and a couple others in a size I don't mind holding through a real correction. For short term guys like you, at a minimum I think there will be a lot of opportunity in the near future.
I am also looking at getting short miners. In spite of the strong move in gold this week, my data on miners is really quite weak, especially XME. If the market decides to not crash I think it could pay off pretty well.
i I would wait on SQ, but thats just my personal opinion. You hit the nail on the head, market is just shrugging everything off right now regardless. We made a joke yesterday that there could be nukes flying and the stock market STILL would not react, the analysts would just try to figure out where its going to fall and they would upgrade anyone who didnt get nuked, lol.
OK here is my pick. Short GOLD. I trade with some ACD software I wrote and on the longer term view GOLD is 2nd from bottom in the GDX etf. On the short term it made a recent move into the top half, and after yesterday it returned to the bottom. It should also be on the radar for a mean reversion trade for the funds that do that sort of thing. That is kind of what I look for in a shorter term(1-5 day hold) candidate. There, that is my attempt at contributing now that I made some money from this thread.