You nailed yesterday's Close.... BEAR TRAP!
Now if the daily would get some follow through. The last week has seemed like nothing but a premium trap, bull and bear.
Holding overnight without a hedge is disastrous but the hedging wipes out the next day's gain. It's just a day trader's
market right now.
Hedging makes sense
1) When you trade billions of dollars and cannot quickly exit without moving the market
2) To protect against black swan type events (by buying far out-of-money options)
If you are hedging on small accounts, in short-term trading, it offers no advantage. It just adds to confusion and transaction costs. It's just a psychological aversion to taking stop loss hits. You will lose more money by fully hedging, than by not hedging. Even if you partially hedge, you take hits on your profits, which in the long term is worse than hedging.
Look at John Hussman's performance (hedged vs unhedged). It will open your eyes on the cost of hedging over the long term.
You cannot continue to bury your head in the sand and think hedging will reduce your losses somehow. In fact quite the opposite.
Edited by NAV, 11 April 2018 - 12:37 AM.