The past week was volatile in equity and quiet in grains. Indices were down in early part of the week but up sharply in the last two days with the better than expected job numbers on Friday. ES & SPX retraced a little more than half of the last down turn and the long term up trend is intact. We should be able to tell if the pull back is over.
Grains were in a consolidation mode awaiting next Friday's WASDE report. It's widely expected the report would set a new low and possible the bottom for this year's grain prices. There have been signs of profit taking and short covering before the report. I am still waiting for the report to exit my puts for this month. Some of my OTM puts in wheat are under now. I may have to take stops as part of my cost of hedging.
My transition from trading naked ES to SPX credit spreads continued last week. I can't say that I have gotten a handle on it yet. My mind set is still hanging on the 1$ credit shred. I will try to take 80c at my level of safety when the volatility reduced.
I didn't see any major mistakes in trading this week. What I did right:
1. Being patience waiting several days for VIX to come to my level of price. It looks like I would be reward for it. Be patience may not always get what I wanted but it will definitely reduce my risk and keep me disciplined.
2. I am more conscious about my emotions whenever I have the urge to chase a trade or move my prices to fill in an order.
Goals of next week:
1. Continue to monitor my emotions during the market movement, pay attentions to the ideas from my subconsciousness when emotions are running high.
2. Be more decisive to follow my rules and plans. Not change them following every price movement. As a experienced trader said: once you laid out a trading rule, follow it strictly.
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