Saturday, November 17, 2007
Change of Trading Tactics
Since the big loss on Tuesday I've swtiched trading tactics. I now plan to do pure day-trading in the near term - only betting on the direction of the market for the next few minutes or hour - though I have an opinion based on the model about what will happen in the course of the day I'm not explicitly betting on that outcome. However, I am using the model to decide on the predominant direction to place trades. So for example, on Friday the model was long and so I looked for long trades. If the model was correct these trades would get some extra lift from the overall trend for the day. I've seen some good short trades in the last couple of days but not taken them. As I get more confident I may add these too. I'm spending some time in the evening here after the European market opens to trade and in the morning in the last couple of hours of US trade. The speed and momentum feels very different in these two periods. During the Asian session momentum (volume) is so low it is hard to trade the US futures at all. I've made $550 in these two days. At this pace I could get back to my peak profit level in one and a half months. But there are no guarantees that my success rate - win percent 83% and win-loss ratio of 16.3 - will continue. The win loss ratio (average win per contract in winning trades divided by average loss per contract in losing trades) certainly won't remain so elevated!
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1 comment:
Day trading is the only way to go until the market makes up its mind. I think if december does have a rate cut, an emergency one, it will be the last rate cut of its cycle and fed will soon have to raise rates again throwinig the stock market down into a spiral. so up in january then down down down.
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