nope it will be closing out. Good thing I said 1/2
position because it was part of the old SPY system and carried more
risk whereas the newer stuff had not had a high enough move to
trigger. only reason it held yesterday even was because the MOMO
indicator was red that it holds by.
That short system has 2 parts for exit, the first is a close
below the 8 MA, which is a fast MA, that was achieved yesterday and
the minimum target to close out: think about that like a reversion
to mean, which clearly got by the close of yesterday. Had I
have the momo off it would have exited - LOL can't catch a break.
The momo is an attempt to catch larger moves than simple
reversion to mean moves which you always always get! But
sometimes in this volatility it will turn a winning trade into a
loser if prices revers suddenly. anyway it's out at today's
close and I did say this version can have higher draw down risk and
is part of the old system which is why I said do 1/2 position.
The 1 contract option is down a few hundred dollars. anyway
other higher probability sub systems will likely trigger on higher
prices, especially if SPX works up to 2580 - 2600 range over
time
that short sub system basically looks for a reversion to mean
pullback, i.e. for prices to close back below the 8 MA, which you
can almost always achieve but are short term trades. The momo trend
indicator is an attempt to try and catch bigger moves vs just
always closing out so quickly, most of the time that works but
occasionally on big volatility where you can get reversals like
today it can turn a reversion to mean winning trade (which we had
yesterday) into a small loser.
Maybe a good option in the future is to close 1/2 the position
on the close below the 8 SMA just to lock something in.
this graphic shows what I was discussing below with that short
on SPY
The chart on the right shows the system with the momo indicator
on, therefore it will not close trades when price closes
below the 8 MA if the momo indicator is red at the time, when it's
green it will exit. On the most recent trade the momo
indicator was red yesterday and that's why it held
the chart on the left shows the momo indicator
turned off, therefore any shorts are simply reversion to
mean trades that close out cover on a close below the 8 SMA, as you
can see it closed yesterday.
Here's the conundrum: the version where the momo is off on the
left that version will actually be re-shorting today at the close
for a NEW trade.
However the version on the right which is closing out today,
cannot enter a new short because the system cannot logically close
out a trade on the same bar and then then re-enter that same trade
on the same closing bar. It would have to short Monday or
another day
One option for me would be to just leave the system short and
issue a 2nd entry, however I hate trying to make that decision on
the fly, plus shows the market go higher other systems will
trigger, I'll probably just send the close exit here today. Anyway
simply disclosing to you the information
anyway I updated the section, sucks on that one, but minor loss
honestly.
otherwise besides the back and forth action on these last trades
I'm actually very excited for this year because I think this will
start nailing some big trades, and these are all live real trades
now.
Matt, should we be looking
Posted by tgo5043 on 4th of Jan 2019 at 02:10 pm
Matt, should we be looking at a possible 2nd entry on the Spy Short system ?
nope it will be closing
Posted by matt on 4th of Jan 2019 at 02:14 pm
nope it will be closing out. Good thing I said 1/2 position because it was part of the old SPY system and carried more risk whereas the newer stuff had not had a high enough move to trigger. only reason it held yesterday even was because the MOMO indicator was red that it holds by.
That short system has 2 parts for exit, the first is a close below the 8 MA, which is a fast MA, that was achieved yesterday and the minimum target to close out: think about that like a reversion to mean, which clearly got by the close of yesterday. Had I have the momo off it would have exited - LOL can't catch a break. The momo is an attempt to catch larger moves than simple reversion to mean moves which you always always get! But sometimes in this volatility it will turn a winning trade into a loser if prices revers suddenly. anyway it's out at today's close and I did say this version can have higher draw down risk and is part of the old system which is why I said do 1/2 position. The 1 contract option is down a few hundred dollars. anyway other higher probability sub systems will likely trigger on higher prices, especially if SPX works up to 2580 - 2600 range over time
that short sub system basically
Posted by matt on 4th of Jan 2019 at 02:19 pm
that short sub system basically looks for a reversion to mean pullback, i.e. for prices to close back below the 8 MA, which you can almost always achieve but are short term trades. The momo trend indicator is an attempt to try and catch bigger moves vs just always closing out so quickly, most of the time that works but occasionally on big volatility where you can get reversals like today it can turn a reversion to mean winning trade (which we had yesterday) into a small loser.
Maybe a good option in the future is to close 1/2 the position on the close below the 8 SMA just to lock something in.
this graphic shows what I
Posted by matt on 4th of Jan 2019 at 03:45 pm
this graphic shows what I was discussing below with that short on SPY
The chart on the right shows the system with the momo indicator on, therefore it will not close trades when price closes below the 8 MA if the momo indicator is red at the time, when it's green it will exit. On the most recent trade the momo indicator was red yesterday and that's why it held
the chart on the left shows the momo indicator turned off, therefore any shorts are simply reversion to mean trades that close out cover on a close below the 8 SMA, as you can see it closed yesterday.
Here's the conundrum: the version where the momo is off on the left that version will actually be re-shorting today at the close for a NEW trade.
However the version on the right which is closing out today, cannot enter a new short because the system cannot logically close out a trade on the same bar and then then re-enter that same trade on the same closing bar. It would have to short Monday or another day
One option for me would be to just leave the system short and issue a 2nd entry, however I hate trying to make that decision on the fly, plus shows the market go higher other systems will trigger, I'll probably just send the close exit here today. Anyway simply disclosing to you the information
anyway I updated the section,
Posted by matt on 4th of Jan 2019 at 04:16 pm
anyway I updated the section, sucks on that one, but minor loss honestly.
otherwise besides the back and forth action on these last trades I'm actually very excited for this year because I think this will start nailing some big trades, and these are all live real trades now.
thanks Matt, I really like
Posted by morton7 on 4th of Jan 2019 at 04:37 pm
thanks Matt, I really like the new format and easy to follow.