Tuesday, June 14, 2011

June 13th Bad Trade - June 14, 2011

  1. I believe I would not have been out so much money had I had a lower stop. 1 ATR obviously was not enough to account for volatility for the time frame of my trade. Looking at the red circle it seems pretty clear I was hit by algorithms set to take out stops.
  2. Alas also my second blunder, or shall I say the greatest blunder of the year so far was entering an over leveraged position by accident. Though the trade was well executed and was the correct underlying asset it was the wrong size. As soon as I realized this I should have exited my position.
  3. Thirdly, my strategy was this, expect price jump on open on Sunday. Since that jump never happend and prices continued to taper off on anemic volume I should have exited right away. 
  4. This trade did not follow my specific guideline. 

Got to get back to the basics, this experience was a bit surreal. It has been awhile since I seriously traded which is bad and good. The safest thing for me to do is wait for a strong break to the upside at 100.09 level and target 2.00s. The intraday volatilty on the DX really really killed me. Not being aware of that volatility really ended up hurting. Overall the DX ended up lower which should have helped me but crude ended up much lower because of it. 

Pound seems to be approaching psychological level of 1.65 and EUR/USD can move to 1.45 before its big test. Actually the UK inflation was met with 4.5% inflation inline expectations. Currently GBP/USD is up on the hour.

The GBP vs the Asian pairs seems fit to bounce off support, while there is consolidation on the GBP/CHF. The GBP/USD uptrend seems still in tact. Overall it seems the pound is technically fit for broadbase rally. 

EUR in general all pairs seem fit to continue strength on a technical basis. Despite slight volatility from the Greek downgrade from B to CCC, which messed up my crude position and was shrugged off by investors... the EUR strength is still in play. 

Lastly, the ES despite back and forth yesterday ended slightly positive giving it enough of a base to rally overnight. Overall environment seems favorable for what I was looking for early in the week but poor volatility considerations stopped me from participating. 

Analyze Capital LLC

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