by Gavin M
I think we have established quite well that I am not an expert on all things related to trading. I am however, a seasoned trader but that's about it. Today, specifically at the open, I made money and lost money. I monkey hammered the VIX and went long ES while shorting AAPL at the open. Why? I don't know, because it felt right. As far as chart reading went, that was what I was predicting. All the trades worked swimmingly at first then AAPL did a 180 and started going up for no damn reason. That was when things went full retard.
I ended up positive today because I chose the trades well. The most agonizing part is knowing that I was right all along as AAPL slid to 129 (which was my target) towards the middle portion of the day. So this brings us to the issue at hand - the endless mind f****ng by these markets. It certainly is not fun for daytraders. I don't suppose swing traders and position traders are doing quite well especially with these massive stop hunts. When I say stop hunts, if you were short at 2118 yesterday because you were so cool, if you had put tight stops, they would've been taken out at the opening ramp.
AAPL was the worst today as it tested 130 then fell to 129.50 only to test 130 then to 130.4. People who placed their stops were surely taken out on that stupid ramp as I was. So how do you survive the current market environment? Well, you pick the securities to trade. Fortunately for me, I have forex and futures. Diversity provides security in this case. If you are stuck being a stock trader, you will undoubtedly be in a dilemma between putting farther stops or not putting stops at all. Nobody, and I mean nobody today was spared on AAPL. If you shorted 130 Calls, those went against you 40 cents and that can be brutal and can induce the dreaded margin call for normal traders. If you went with the Puts instead, that position also went down by almost 50 cents.
I don't know what these jerks are trying to do. One thing is for sure, they are making it that much harder to trade these markets. If a seasoned trader like me found it challenging, I can imagine what someone who has zero training and no clue trading is doing at this point. How can you beat the current environment? You either have to get good quick or leave it alone for awhile. This is where experience and training count.
Traders from Equity Sense will be writing on this blog on positions and other market-related things.