The majors reversed the rally mood in the last two days of this week. The risk factors are: the January inflation number is higher than expected; Fed speakers are more hawkish on interest rate hiking; The increasing Russia and Ukraine tension. Seasonally, there is likely another leg down in mid of Feb before the market turns up. The key is how to survive this downturn? It could get worse with these risk factors above.
The IB Netliq is at $145712, down 10K from last week excluding the 10K borrowed from ET today. The available funds are much less since I mishandled the long positions. I have 3 more long positions in SPX due to the sudden drops in the last two days. The leverage is back above 3.33. The realized P/L is -$690. I had many small wins and the long put spread hedges helped. But these 3 short puts in SPX drained a lot of my B/P. These long hedges helped to collect $9250 cash.
The personal accounts performed fairly. They collected $1570 for the week. I shouldn't have traded in my TOS account as I plan. I am not familiar with its order entry system. I lost $300 in it today since it won't allow rolling options in the last 15 min of the trading days. I need to be more cautious when the VIX is high.
My biggest problem is still the stop orders. I must get into the habit of placing stop orders right after I entered a position. I can easily recover a 2x or 3x loss. It's much better than rolling with 4 plus times losses which drains a lot of my B/P. I took a couple stops last week which didn't feel too bad.
Lessons learned this week:
1. Stay disciplined. I broke my rules by adding more positions and not placing stop-loss orders.
2. Be quick to change my bias when the market condition changes. Plan to take action with the new market condition. Don't be like a deer standing in front of headlights.
Next week could be another rough week as the price action and seasonality indicate. My plans are:
1. deleveraging;
2. take stops;
3. trade with the trend;
4. reverse positions when needed.
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