For futures traders, this trade involves shorting the nasdaq in anticipation of a resumed down trend tomorrow. While I do not like to present entertaining suggestions for overnight futures positions, due to low volume price volatility and potential manipulation at night, one could take a short position after the futures market opens at 6 p.m. Understand that this kind of trading presents an extreme risk of loss, because of the nature of futures or shorting stock. Futures is by far, the most risky. Full emini (/nqu22, for instance) bears a 29x leverage, according to the Chicago Mercantile exchange. do learn the risks and your suitablity before entering into any futures trade.
I will not suggest a stop loss. That is at your discretion. However, if you don't set it above today's high's the risk of getting stopped out increases substantially. Conversely, the higher your stop loss, in a short position, the greater your risk is in terms of amount you can lose. If you opt not to trade at night, it is entirely possible that the futures market will go lower in the night, making a gapped down situation in the morning, which is a movement that may confirm bearishness, but also changes the risk / reward scenario. Such a downward night move may make the entry point less favorable, if a rally follows to close the gap on open of the exchange at 9:30 a.m.
The target profit point, using the above chart might be 11568, above the double bottom of Thurday's trading day (11547).
Theory: The market is heading lower, having in my opinion exhausted the multi day rally against the trend. The market may head substantially lower than the profit target. However, taking substantial profits, and then determining whether or not some recovery is likely is much preferred for many speculators over longer duration trades with increased time of exposure / market risk.
Other considerations: There may be substantial buying in the morning, pushing the market higher before the anticipated failure. A still risky move may include waiting to put in an entry upon a failed (short). In that case, I would look for a rally to a point less than today's high's, followed by several minutes that fail to go higher. I might use 3, 3 minute bar charts where a top isn't exceeded. Other's use different points of entry. It depends on price action, so I leave that to your discretion as this is simply an idea for your enjoyment and is offered not as a specific trade, but as a tweakable suggestion to take at your own risk. Bear in mind, if you wait for a failed intraday rallly to enter, you could miss the move. That's part of what makes trading so challenging. It is always better to miss a move than to enter at a point at which you are not confident. Resistance and support are key considerations.
I believe this Friday (tomorrow) could be a several hundred point down day. On the other hand, one has to be prepared for a reversal if residual bulls are not ready to close out for the weekend.
I hope someone will find my observations interesting and educational entertainment. This is more art that science, as is any market trading, in my opinion. I am in no way to be confused with being a financial advisor.
I will not suggest a stop loss. That is at your discretion. However, if you don't set it above today's high's the risk of getting stopped out increases substantially. Conversely, the higher your stop loss, in a short position, the greater your risk is in terms of amount you can lose. If you opt not to trade at night, it is entirely possible that the futures market will go lower in the night, making a gapped down situation in the morning, which is a movement that may confirm bearishness, but also changes the risk / reward scenario. Such a downward night move may make the entry point less favorable, if a rally follows to close the gap on open of the exchange at 9:30 a.m.
The target profit point, using the above chart might be 11568, above the double bottom of Thurday's trading day (11547).
Theory: The market is heading lower, having in my opinion exhausted the multi day rally against the trend. The market may head substantially lower than the profit target. However, taking substantial profits, and then determining whether or not some recovery is likely is much preferred for many speculators over longer duration trades with increased time of exposure / market risk.
Other considerations: There may be substantial buying in the morning, pushing the market higher before the anticipated failure. A still risky move may include waiting to put in an entry upon a failed (short). In that case, I would look for a rally to a point less than today's high's, followed by several minutes that fail to go higher. I might use 3, 3 minute bar charts where a top isn't exceeded. Other's use different points of entry. It depends on price action, so I leave that to your discretion as this is simply an idea for your enjoyment and is offered not as a specific trade, but as a tweakable suggestion to take at your own risk. Bear in mind, if you wait for a failed intraday rallly to enter, you could miss the move. That's part of what makes trading so challenging. It is always better to miss a move than to enter at a point at which you are not confident. Resistance and support are key considerations.
I believe this Friday (tomorrow) could be a several hundred point down day. On the other hand, one has to be prepared for a reversal if residual bulls are not ready to close out for the weekend.
I hope someone will find my observations interesting and educational entertainment. This is more art that science, as is any market trading, in my opinion. I am in no way to be confused with being a financial advisor.
Comment:
In other considerations: Failed Rally for the day. part of that was left out in the paragraph above. further explanation: a 3 bar confirmation (either 3 minute or 5 minute charge) of the markets apparent inability to head higher is suggested for trade entry (short).
Comment:
Well guys, much to my dissatisfaction, the market is up. I'm holding a huge short position and I won't say how many multiple 6 figures the position is in the red.
My instincts are telling me this won't hold. Fundamentally, the small retail investors will hold their positions, but the larger traders won't want to be exposed in long positions over the weekend, in my estimation. If it goes above 12,000 and holds for more than 5 minutes. I will liquidate half my positions as risk management.
The buying is on respectable volume. Note that U of M consumer sentiment comes out at 10:00 a.m. It will undoubtedly be no better than last time, for what its worth.
For those who didn't enter yet, I envy you if you liked the play. If we don't have a continuation of this rally to 11985 on /nqu22 in the next 10 minutes, this will be significant probability the rally has ended and the sell off may come very fast.
This is at 9:52. a.m.
My instincts are telling me this won't hold. Fundamentally, the small retail investors will hold their positions, but the larger traders won't want to be exposed in long positions over the weekend, in my estimation. If it goes above 12,000 and holds for more than 5 minutes. I will liquidate half my positions as risk management.
The buying is on respectable volume. Note that U of M consumer sentiment comes out at 10:00 a.m. It will undoubtedly be no better than last time, for what its worth.
For those who didn't enter yet, I envy you if you liked the play. If we don't have a continuation of this rally to 11985 on /nqu22 in the next 10 minutes, this will be significant probability the rally has ended and the sell off may come very fast.
This is at 9:52. a.m.
Comment:
I'm' either really stupid today or my brass balls are very heavy. This rally is truly insane. Unless I missed some key news. This technical rally, while painful to my account will set up a 10% daily drop in the very new future.
Smart trading logic says don't sell this rally until it fails and maybe fails twice today. I did liquidate half of of one of my very small accounts to avoid a margin call.
This is what makes futures so challenging. It's coming down, but timing is a killer and my timing on this one has been a day and a half early. There really is no room for hope in futures trading.
Smart trading logic says don't sell this rally until it fails and maybe fails twice today. I did liquidate half of of one of my very small accounts to avoid a margin call.
This is what makes futures so challenging. It's coming down, but timing is a killer and my timing on this one has been a day and a half early. There really is no room for hope in futures trading.
Comment:
I'm still in the trade, other than for a very small position I bought to close at 12,002 earlier today on an account that had insufficient capital to carry it further.
While early in my call to short, as I suggested in my update before lunch today, I believe this trade will work out. The market (NQU22) reached 12082.5 in the 10:05 a.m. 5 minute bar. It's been trading in a depreciated narrow range for the past hour. Presently its 12:46 p.m.
If I hadn't a large position, I would enter now 12006 for a short position, setting a liberal stop loss (I don't use them
While early in my call to short, as I suggested in my update before lunch today, I believe this trade will work out. The market (NQU22) reached 12082.5 in the 10:05 a.m. 5 minute bar. It's been trading in a depreciated narrow range for the past hour. Presently its 12:46 p.m.
If I hadn't a large position, I would enter now 12006 for a short position, setting a liberal stop loss (I don't use them
Comment:
As we get later in the day, a sell off of any magnitude, whether /es, /ym or /Nq starts it of, say 100 pts. may lead to a major cascade effect, as traders don't want to be caught over the weekend with long positions in a bear market, whose rally has failed.
If the above case occurs, I will hold my positions over the weekend and look for a large potential drop in the Sunday evening, Monday very early pre market futures. Should all this come together, this will be my largest winner, instead of my largest loser. I believe this market is just getting started on the downward move and has in no way reached a bottom, or even close.
For that reason and the fact that this is my luxury items fund and I haven't year to date drawn off my profits, I am willing to take big risks. Other's should consider whether they are suited to this. It is speculation, not investing!
If the above case occurs, I will hold my positions over the weekend and look for a large potential drop in the Sunday evening, Monday very early pre market futures. Should all this come together, this will be my largest winner, instead of my largest loser. I believe this market is just getting started on the downward move and has in no way reached a bottom, or even close.
For that reason and the fact that this is my luxury items fund and I haven't year to date drawn off my profits, I am willing to take big risks. Other's should consider whether they are suited to this. It is speculation, not investing!
Comment:
Guys,
My entertaining idea has worked out poorly thus far. This is now an instinct trade and has been for the entire day of watching the market climb in the worst economic decline I am aware of in my 58 years. The market does not care what we think or even know when we're in it.
So, I felt I had to liquidate 2 more /NQ positions to keep from further loss, to the point of a possible margin call which I won't allow myself to get to.
I am staying with a very large short position, notwithstanding a very untimely entry. If you haven't gone into this position.
The trade is essentially a bust. I admit defeat, but will not accept it yet. While I cannot for the same reasons stick by my beginning thesis and trading plan, I remain very bearish on this market and do wonder what was driving the buying this week. Whether it was wishfull thinking or raw determination not to have a 4th losing week in a row on the Dow, I do not know. Just when I think I've seen it all, a day like today happens and my conviction is my undoing.
Since these are only ideas and not recommendations, I will pretend my creditbility is in tact as a trader.
I will come out with a new idea over the weekend, as I am constantly reviewing and evaluating the market. The idea that we have not seen anywhere near a bottom is my guiding principal. However, that may be, anybody should make their own best guess and assessment of the markets. This was a very bad week, but not the worst week I have had. It was probably the single worst day, but with big risks, big losses will occur. Such is futures trading.
My entertaining idea has worked out poorly thus far. This is now an instinct trade and has been for the entire day of watching the market climb in the worst economic decline I am aware of in my 58 years. The market does not care what we think or even know when we're in it.
So, I felt I had to liquidate 2 more /NQ positions to keep from further loss, to the point of a possible margin call which I won't allow myself to get to.
I am staying with a very large short position, notwithstanding a very untimely entry. If you haven't gone into this position.
The trade is essentially a bust. I admit defeat, but will not accept it yet. While I cannot for the same reasons stick by my beginning thesis and trading plan, I remain very bearish on this market and do wonder what was driving the buying this week. Whether it was wishfull thinking or raw determination not to have a 4th losing week in a row on the Dow, I do not know. Just when I think I've seen it all, a day like today happens and my conviction is my undoing.
Since these are only ideas and not recommendations, I will pretend my creditbility is in tact as a trader.
I will come out with a new idea over the weekend, as I am constantly reviewing and evaluating the market. The idea that we have not seen anywhere near a bottom is my guiding principal. However, that may be, anybody should make their own best guess and assessment of the markets. This was a very bad week, but not the worst week I have had. It was probably the single worst day, but with big risks, big losses will occur. Such is futures trading.