Ok..now I suppose everyone is feeling slightly to raving mad bullish and not at all bearish..cursing themselves for taking those short positions hehe..Its good. This is how everyone is feeling..and is a natural cycle of market psychology nothing else.
So as I mentioned..Options were disintegrating yesterday so I covered them all..I had OCT PUTS...did not want to hold against the obvious decay in price and this turned out to be a good decision.
SO...I am holding shorts today..October NF..hedged with 5000 calls which I entered yesterday around 17-18. Its 33 right now. So it offered me some sort of protection. Not much but something. And also in these kind of situations, I hedge at the ratio of more than 1:1..Means if I have 2 lots NF short, I might have 3 or 4 lots Options 5000 call long..This is because of deltas. A google can help you understand this better. I am not the best person to explain.
So coming to the crux of the matter, I dont think we are entering a new bull move. This is just a squeeze of the shorts. And this is the same game thats played always..over and over again. Once all the shorts have covered or have been squeezed, the next move down will start. Is it ready? Are we there yet? Maybe..But definitely close.I will be trading today according to this principle.
Updates will follow with charts. Havent got a chance to look or analyse them yet.
EDIT:
1. If you have been trading/adding short like me since morning, now maybe a good time to take some off just to be on safe side and also to reduce shorts cost. I have done this and will be going offline in a little while.
Best,
Lee
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6 comments:
lol... nice write up le... you know what!? for some time yesterday, even I started feeling bullish and cursing myself for building all those shots :P :D
Thanks for continues update lee.
Keep it up
Hey Lee, i have been a silent follower of your Blog & let me tell u r doing such a great job helping guys like who does not understand technical analysis but just follows & i have been foloowing ur guidance & yesterday i didnt close my shorts felt a pinch though but i am happy i am already at my break even time to make profits now . Thanks to u Sir & GOD bless u wit lots of happiness..!
that nice Lee - getting up"updating" again"sleeping" again "updating" :):D
thanks
Lee, good going! Ever considered using other indicators to fine tune taking positions? Like, Hurst is good for a general direction of the market. And use RSI/MACD divergences and Stochastics to take positions instead of going blind, with full faith that the eventual Hurst prediction will happen. I know you are hedging your positions, but that is like paying premiums for unnecessary insurances.
Gokul
If ever you are feeling doubtful or unable to sleep over your positions, it generally means that either you are over leveraged or are on the wrong side of the market..if so, its always better to reduce exposure or even totally close out - This is something that I have been trying to follow but kinda tough to control fear and greed - but still needs to be done.
Thanks all for your comments.
Sujatha no getting up from sleep and all to "update"..sleep is just too important for me!
Gokul, no no blind believing in Hurst. not at all. But I am focusing on Hurst. But I have mentioned many times that traditional TA also makes up an important part of my overall trading strategy.
I do not use RSI, Stoch, MACD etc..I used to a long time back but now its price that is the most important to me. Just price and time. Everything else is just derivatives of this right? maybe volume is not. But price and time is all you need. So Hurst gives me the time side - but can we blindly beleive.No!..Thats where price levels come in..supports, resistance, earlier points of interest, trendlines, patterns etc etc..Fibo levels and so on. And most importantly experience and position management which is something that will only come through experience. In fact i will say money management is responsible for more than 80% of whether your are successful or not. But most ppl ignore this and so fail miserably.
Best,
Lee
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