I want to set up a short for the YM. What do you thnk?
I got to thinking about this idea tonight and would like some feedback. So, I am of the belief that we are in an overbought situation. I don't know if QE3 will happen but I have a firm belief that this market is going down. With that said, what about placing an order with stops to take advantage of a big downturn? I don't know if people already do this or maybe the idea sounds ludicrous. I am a newer trader and so I am subject to be wrong about 99% of the time. Still, I know this market is headed down and want to take advantage of it.
My thinking is to short the YM and set my sell entry at 11850, below resistance. Enter there and let it run to 11900? A stop at 11845? Is the YM $5 per tick/point? I think that is right.
If you guys say I'm crazy, I can take that. There must a be way though to take advantage of a market that you think is going to come down in a sudden spike. I don't see a lot of downside with a stop on place. Please tell me what you think or how you might adjust it. I think I would have to obviously keep my eye on it because of the market starts heading down gradually, I would have to adjust my entries. I am thinking of a SUDDEN down turn. I am not that familiar though with the YM and I don't know how much it would drop in a scenario like that. I would also be up for doing something with the VIX also. Do you guys have any kind of future plays like this?
As a new trader there are a few things everyone learns.....
The first is, you dont know shit. The second you say you know something, your done for.
The market is likely to take your idea, and shove it down your throat.
If you still want to sell it, I would suggest two things:
1. wait for it to start failing. Large corrections don't happen over the course of 1 or 2 days, and there will be plenty of suckers picking bottoms saying its just a pullback to keep the trade pressed for a while.
2. Use an instrument with less leverage.
edit: didn't mean to sound rude, we all started somewhere.
double edit: also keep in mind that just cause the vix is grinding the bottom of the barrel doesn't mean price is coming down when volatility lifts.
"If I agreed with you, we'd both be wrong."
Last edited by addchild; August 22nd, 2012 at 07:52 PM.