My primary hypotheses of market movement on this FOMC day was wrong. I thought the market was going to squeeze out most buyers at the bottom and then force the seller to cover before 2PM announcement. Apparently the emerging market currency crisis has more pressure on US market than I expected. ES could not stay in yesterday's range for the most of today.
My exit plan based on the above hypotheses didn't work out so well. Market fall out overnight when I was near break even before I went to bed last night. I plan was to exit my last 2 positions 1 - 1.5X loss before 2pm announcement. But ES never came back to the mid level of 1785 to get ready for FED. I ended up taking 2x stops right before and during the announcement as my timed orders are getting expired. Overall, the losses are within my rules of 1.5-2X of my entry. That's a big improvement comparing with my handling of last Sept's loss. I am now gladly to take stops. I just need a more strict rules and decisive actions. I can recover from a 1.5-2X loss in about two weeks.
I followed my rules of not trading during the 1ST hour of FOMC. I only had 1 fill of 1650 two weeks out. It's not likely although possible that ES falls another 110 point in two weeks. But the downside appears not over yet from a TA stand point. Fib 50% RT from last Oct low is at 1740. I have to deal with my two positions at this level next. Plus the emerging market currency risk is on. Expect a volatile market in the near future. I may need to shift my attention to commodity now.
Quote of the day: “Luckily, markets give us a chance to go to our corner, regroup, and get ready for the next opportunity.” (Derek Hernquist)
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