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Troy - Some comments - You went short just before both the Dow and SPX
were close to important support levels - 9250 for the Dow and 1180 for
SPX. Although a strong downdraft was in progress, it is a low
probability/high risk trade to short right before a support level is
reached - there is a good chance that the market will bounce, which it
did. You reversed, trying to chase the market, and after it bounced off
of support the market resumed its decline. The above support levels were
so psychologically important to the market that the bounce really lasted a
full three hours until 1:00 or so for the SPX, and until after 2:00 for
the Dow, even with strongly negative breadth the whole time. You were
right in reading the overall direction of the market today, but your
timing was not good. Here is a suggestion - around a significant support
or resistance level, it is better, in my opinion, to let the market stall,
then while stalled bracket both sides of the market with entry stops,
keeping an appropriate distance for noise. Then let the market choose its
own direction and pull you in. The market today could just have well shot
back up 100 points after stalling at 9250. With an entry stop on both
sides, you are ready for either direction.
By the way, I have done exactly what you did today and worse. The key is
to learn from it.
Dan
Troy Kelley wrote:
> I am trading 2 s&p contracts.
>
> I went short at 10:15 today, and the market came up and took out my
> stop, so I did a reversal and I went long at 10:17 and the market
> screamed back the other way against me. I lost 1,500 bucks in about 5
> minutes. That is about one weeks worth of hard earned profits, gone in
> the blink of an eye.
>
> Troy
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