Trading cycles oscillate between normal and challenging. The periodicity of the cycles is unknown but we seem to be rotating in the right direction. The percentage of winning days has been very low and in the same place it was in early August before the portfolios had a nice runup. Also, the markets had sold off in early August which generated some good trading action. This pullback today could be the start of a good setup for our day trading systems. I think the markets could sell off more and then potentially rally again into the end of the year following more routine market patterns. The exact path isn't as important as the setup for some good trading.
At the close yesterday, it felt like an obvious short signal for the night session. Yesterday afternoon was one of those propped up days that finished its selling overnight and today. I am working on pinpointing those rare overnight sell signals. We discussed the extended RSI Divergence today and the potential mean reversion pattern on the daily chart in the Nasdaq 100 futures.
The One Million MNS 105 was up about +.05% on the day while the 250K Portfolio was up about $100. The hypotheticals were up about 0.5% or $5K and $1k on the 250K Portfolio. Tradestation had issues with its connection to the CME for about an hour and many initial signals were missed on the day. It was good to see the bounce in the portfolio but disappointing to miss more gains. On a positive note, I am glad we only missed a small gain and not a larger gain of 1 - 2% or more and it was positive to see the portfolio bounce back some and for the market to trade more "normally". It would be good to see more of the move during the day session since a large percentage of these up and down moves have been overnight.
The Stock Index Portfolio 18 hypothetical signals were +$6,365 per E-mini and +$637.50. Many of the signals were early and would have been missed in live trading at Tradestation.
It is one of the difficulties of trading when you miss profits after a losing streak based on brokerage issues beyond your control and certainly frustrating. Risk management and persistence can get us back to equity peaks but when the market isn't acting up, sometimes technology does.
All these gaps in the market and the pre-election and post-election cycle have been different and generated a more emotional market instead of the routine environment we typically see. This move lower in the indexes, I believe, helps take us back towards a more normal market. I look forward to next week's trading.
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