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Complex Bottoming, Part 2: Nearer to a sustainable LOW


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#491 K Wave

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Posted 15 October 2022 - 12:01 PM

 

 Or how you entered LONG on Thursday morning on a 90 point SPX gap down and exited with a 2 point loss. You must work miracles. 

 

You have to follow along pretty closely, but I saw exactly how this happened.

 

He averaged down as he described above, and when the big ramp came off the bottom, he got back to a bit above even, he wisely got out with a small profit and "reset" for the next trade.

 

Honestly, it has been amazing to watch. But IF there ever IS a hard break on a Monday like 1987, naked puts could be a world of pain.

But if he has deep enough pockets to survive that pain, and importantly, be able to add on the way down without getting margined out, there is almost always a huge rebound rally where he could again perhaps get out with a small profit.

 

But of course, he would entirely miss the big crash move, because if that move comes, he will almost assuredly be long, as crashes come from TERRIBLE sentiment.

This is where charts could be a huge help in timing the entry, and avoiding getting hit with big drawdowns.

 

But again, such events are extremely rare, and the market as measured by the indexes DOES INDEED spend the vast majority of its time backing and filling, up or down. And that is why if no crash does come, and you do not play too big on the initial position, and have reserves available to add as it moves against you as long as needed, it can be a winning strategy...as long as no Black Swan comes along that exceeds that capability.

 

My concern right now is that we are definitely in an area where that very rare Black Swan could suddenly appear.


Edited by K Wave, 15 October 2022 - 12:01 PM.

The strength of Government lies in the people's ignorance, and the Government knows this, and will therefore always oppose true enlightenment. - Leo Tolstoy

 

 


#492 beta

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Posted 15 October 2022 - 01:45 PM

The "average-down-your-losing-trade" strategy makes sense in a BULL market. 

 

In the present climate, it's known as Boiling Frog syndrome.  No thank you. 

 

Anyways, I'll be too busy to post during market hours --and way too distracting to focus on random + phony trades--in what promises to become an increasingly volatile market.

 

Take a look at Nouriel Roubini's latest book review in the FT.  He correctly points out that the global bond markets are the 8,000 lb. gorilla in the room.

 

We are approaching major Fib zones on weekly charts, so perhaps the "avalanche" of doomsday sentiment is reaching a short-term peak.  But if those weekly Fib supports do not hold esp. on TLT, it's TEOWAKI time.

 

Have a good weekend.


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#493 12SPX

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Posted 15 October 2022 - 03:14 PM

 

Ya those 23 months straight of posted winning trades that have never seen a loss are really contrarian, maybe start posting the start and end of your trades and then you can open your mouth otherwise shut it, I should be the one hitting ignore.  Pretty easy to criticize when you don't have the balls to show your trades!!! 

You sound rather rude and vulgar to me.  Case in point. 
 

As for your trading record, anyone who actually believes your statement above that you’ve “never seen a trading loss in 23 months” deserves to go over the lemming cliff.   So now it turns out that you’ve been SHORT against your own LONG calls for the past couple weeks, huh ?  How convenient to post these “winning trades” long after the fact.  
 

And you still haven’t explained why your sitting on 400 points down on a losing NDX trade.  No exit ever posted. Or how you entered LONG on Thursday morning on a 90 point SPX gap down and exited with a 2 point loss. You must work miracles. 

 

Anyways, you and your minions can HAVE the forum.  Very few posters —with the exception of KW, Fib, Douglas, IYB, and a few others— post anything of technical value anymore.  It’s a shame that this forum has become mostly clueless speculators randomly betting on the casino, void of any intellectual merit.  

Carry on with your nonsense.  bye.gif

 

You see again you only read what you want to read.  First off it was a 2 point profit because whenever I see a possible profit I put in profit stops, if it gets taken out I get back in until the move really starts then I average profit stop up.  Secondly, I don't buy any options ever only sell, so for this week, last week and expiration cycles I have sold the calls and puts.  For this coming weeks sells on the 3850 calls it is already showing a $12 profit being around $1.80 the 3500 puts are $23 so I'm 1$ in the red at the moment.  For my expiration cycle trades on both calls and puts I'm still seeing profits as these trades will likely expire worthless especially the puts at 3400, current price $8, sold at $18.50,,,, 3300 sold at $15.50, current price $3.30, so unless there is a big crash they should be safe.  As I've said I've been doing this for 35 years so yes I have deep pockets now.  For my trend trades I was short then after a bit averaged in long.  My Ndx trade is on the futures btw 11013 average sorry so is in the red by 267 points, which isn't alot and as I said a longer term hold.  I will keep adding to it if we continue down.  Nonetheless you were the one that started with the harsh comments I never said anything about your comments. 

 

Monday will be interesting but think it will be like all the others as I have said on here a million times since the start of the year,,,, we are in a grind market and until I see the tape showing me something different I will stick to that.  At the least it will be fun for sure!!!