Wednesday, 9 February 2011

What a Great Losing Trade

I had a great day in the Euro, a T-Bond trade and then there was the ES.

I tried to buy the VAL for the Gap trade but it didn't trade there until after the Gap was filled. By then, if it traded down to yesterday's VAL, it would be a neutral day. The high probability trade is to buy the second range extension and trade it back to the middle.

I was a bit early and bought 1317.00 and then I bought where I should have bought in the first place: 1316.50. My stop point would be where the zipper was, which started at 1315.25. Like general Custer, I made my last stand buying 1315.75 as I would be stopped at around 1315.00 ish if the flow was still downwards.

I, like Custer, was massacred, but it was a good massacre as I did what was in my trading plan. The last position took me to 150% but was very close to my stop point, so the added risk was not much more.

Buying the second range extension in the ES is still a high probability trade for me and I'll keep on doing it. I see double prints on the zipper as I'm writing this and it looks like the market is trying to climb back to the middle of the profile. Again sadly, it will do it without me as I can't buy it here, as the zipper has been violated.

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