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#11 NAV

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Posted 18 September 2017 - 09:09 AM

 

 

Well, going broke may have been extreme but one has to use a decent amount of leverage if they plan on 

making much of anything in a 5-10 year time frame. I mean, a 125K account is only about 500 SPY and going by the

2% position plan is only 10 shares per trade. Most people are not going to have even 125K to trade with outside a 401k or

something anyway. I think options will work but if you do a stop and reverse and then another whipsaw right after then that 

would be at least a 50% loss or more on the position. In the past I used to buy a bunch of cheaper just out of the money

in the direction of what appeared to be a turn and buy a fraction of that in the money the other way as a hedge and try to 

hold through any immediate single or double whipsaw which worked better unless the market stalled in a narrow sideways

range for a week or more. And if it went the wrong way I didn't make anything or took a small loss but better than a 50%+ loss.

But yes, I know what you are saying about position sizing, it's much safer to just use the same amount per trade, but I think

compounding that plus half the gains from each trade could work also.

 

I can't speak for others. But my max leverage is 2x. I trade not more than 6-8 trades a month on the SPX 2X ETFs. Even if i get 6 consecutive losses, given my STOP size of 6-8 points, my max loss would be around 40 points. That's about 1.5% loss on my entire account. With 2X leverage, it comes to about 3%.

 

Now i am a conservative trader. The more aggressive types might trade 5X leverage with futures or options. I used to do that a few years back. But even then it would be about 8% loss, which is not catastrophic. Anybody trading beyond 5X leverage are walking on thin ice. They are bound to blow up their accounts sooner or later. 

 

I usually get about 2-3 lousy months in a year, which end up in small losses, 2-3 months which are wildly profitable where i make most of my money and the rest are moderately profitable or breakeven kind of months. Those who look for profits every day and every month will get frustrated in this business. One has to cultivate a lot of patience and mental game to be in this business. Technical analysis alone is not sufficient. I am typing all this cuz you painted a bleak picture of trading, which it is not. 

 

P.S - Options is the worst instrument to trade on this planet IMO, if you are a directional trader.

 

But best if your an option seller lol!!  

 

 

Agree. Options are in fact mean't for sellers (who know what they are doing).


"It's not the knowing that is difficult, but the doing"

 

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#12 12SPX

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Posted 18 September 2017 - 09:15 AM

 

 

 

Well, going broke may have been extreme but one has to use a decent amount of leverage if they plan on 

making much of anything in a 5-10 year time frame. I mean, a 125K account is only about 500 SPY and going by the

2% position plan is only 10 shares per trade. Most people are not going to have even 125K to trade with outside a 401k or

something anyway. I think options will work but if you do a stop and reverse and then another whipsaw right after then that 

would be at least a 50% loss or more on the position. In the past I used to buy a bunch of cheaper just out of the money

in the direction of what appeared to be a turn and buy a fraction of that in the money the other way as a hedge and try to 

hold through any immediate single or double whipsaw which worked better unless the market stalled in a narrow sideways

range for a week or more. And if it went the wrong way I didn't make anything or took a small loss but better than a 50%+ loss.

But yes, I know what you are saying about position sizing, it's much safer to just use the same amount per trade, but I think

compounding that plus half the gains from each trade could work also.

 

I can't speak for others. But my max leverage is 2x. I trade not more than 6-8 trades a month on the SPX 2X ETFs. Even if i get 6 consecutive losses, given my STOP size of 6-8 points, my max loss would be around 40 points. That's about 1.5% loss on my entire account. With 2X leverage, it comes to about 3%.

 

Now i am a conservative trader. The more aggressive types might trade 5X leverage with futures or options. I used to do that a few years back. But even then it would be about 8% loss, which is not catastrophic. Anybody trading beyond 5X leverage are walking on thin ice. They are bound to blow up their accounts sooner or later. 

 

I usually get about 2-3 lousy months in a year, which end up in small losses, 2-3 months which are wildly profitable where i make most of my money and the rest are moderately profitable or breakeven kind of months. Those who look for profits every day and every month will get frustrated in this business. One has to cultivate a lot of patience and mental game to be in this business. Technical analysis alone is not sufficient. I am typing all this cuz you painted a bleak picture of trading, which it is not. 

 

P.S - Options is the worst instrument to trade on this planet IMO, if you are a directional trader.

 

But best if your an option seller lol!!  

 

 

Agree. Options are in fact mean't for sellers (who know what they are doing).

 

30 years of experience lol!!  Simple strategy but makes for income based trades per month.  Were in an interesting period for trading from what I see.  The market is setting itself up for a fall that wont see highs for a few years if it doesn't smarten up.  If it would just allow some volatility on this rise it would be so much healthier.  Will be interesting to see how it ends!!



#13 12SPX

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Posted 18 September 2017 - 09:18 AM

Which by the way doesn't make me bearish its just a fact.  If we hold here going into October we will break a 56 year record for how low volatility is and there hasn't been even a -2% correction in over a year or -5% weekly lower close in a few years.  That is not "healthy," all I'm saying!