Thursday, July 28, 2011

Trading Plan Before The Vote

Can there ever be a plan for trading on news? It all depends on your positioning ahead of the news. So let's look at variables.

1. You are already short. First of all, congrats!! Second, have you been trailing the stops, and perhaps got stopped out on this mornings retracement? Depending on where your stops are you may still be in. Important thing is you have a stop, I really hope you do. Why trail down? Because you do not want to give all of your profits back, or god forbid, turn a winner into a looser. If you are short NDX you are definitely stopped out. My idea on NDX - do not short it. Leaders always rebound first, fast, and more. Just short the laggards.

2. You are long from this morning. Congrats again!! Trail your stops for god's sake. Market is going to get worried about the vote mid-day I bet. Memory is a funny thing. Traders still remember Dow 777 decline on first TARP failed vote. You did a great thing by catching a lower open and running with it. But overhead resistance is not too far from here at 15min200 I say. So ES_F 1315 and NQ_F 2395 are your exits and take a breather please. Wait for vote, market will still be here after 6 pm tonight. I guarantee it.

3. You are flat. Feel left out?? Do not worry. I never saw traders who could be in every market move. The ones who say they do are liars. Good traders miss the moves all the time, for different reasons, too many to list here. Come 6 pm you will feel good, as some players will understand what it means to go through the news event with a position on. Be flat, be safe, but be ready to act after the vote. Strategize about all of the outcomes and their consequences. Keep your mind fresh until then. Do not listen to talking heads on TV, they are all fake actors. Sit down and write the plan of action for tonight.

Good Luck!!

No comments:

Post a Comment