I Can't Make a Friend of the Trend | Psychology and Money Management


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I Can't Make a Friend of the Trend

  #17 (permalink)

St. Louis
 
Trading Experience: Beginner
Platform: thinkorswim, NT8
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WoodyFox View Post
...suspended my smaller stop strategies...

I hesitate to ask this for fear I'm opening up a semantic can of worms, but I like to parse through others' perspectives. Are you suspending the entire thing? e.g. the pattern, execution mechanics, etc.
I stay with the same strategies and change the risk/reward to accommodate volatility. I see it as a change of tactics.

I presume you know the following, but I'll post it for others: NQ and RTY offer the better opportunity when looking at method expectancy/(relative)margin req. Another indication of this opportunity is their top line behavior. These two tend to rotate around the Dow and S&P, sometimes as leaders and laggards in the same day. In trends, the day over day compounding effect is active. At the other end of the risk/reward spectrum, I see opportunity in index spreads, such as YM-RTY. If RTY has been top-line leader for a multi day trend and then moves to laggard, I see it as an indication that there could be several days of unwinding the "risk-on" trade. That trade is 2x the margin req, but its low risk, making it a good strategy for reserve capital. It can be done with less capital using options and micros. AKA pairs trade.

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