Let’s Try This Again

I had the right ideas yesterday but for some reasons various entries didn’t trigger. So let’s try this one again, shall we? On the equities side I missed out by just a matter of ticks but there is a reason why I’m being such a hard ass with my entries.

We’ve seen a ton of intra-day volatility in the past few weeks and I don’t expect things to quiet down anytime soon. So a more disciplined entry afford me a stop with higher odds of survival. Keep in mind that the stop distance affects the amount of contracts I need to fulfill my R size. The wider my stops the smaller the amount of contracts. That not only affects my leverage but more important affects my precision. Let’s use our futures risk calculator to look at an example;

Here we’ll assume a pretty standard $500k account and our contract is the E-Mini. The stop is 30 ticks – that’s 7.5 handles. Not even a large stop in market conditions like this. As you can see I get to trade 13 contracts and that gets me to $4875 in projected risk. Which means even with 13 contracts I’m only trading 97.5% of my desired risk.

And the E-Mini is an easy contract – try silver which has a point value of $5000. Here I only get to trade six contracts and I’m missing out on 10% in risk. My choice is to either over or under trade.

Fortunately we don’t have this problem on the forex side – particularly if you are trading through IB, which allows single unit position sizing. If this all is a bit confusing to you then I encourage you to play around with both my risk calculators which you can find in the tools menu.

Alright, on the USD/JPY I’m waiting for a drop lower as well. FWIW – I love that configuration and it very much resembles what we’re seeing on the spoos.

More setups below the fold:

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Bonus Chart!

Gold is looking super sweet but no setup just yet. I missed on a bit over a week ago – unforgivable, I know. Alright this one either takes off like gangbusters here or will shake out some of the late late comers. So let’s wait for the latter scenario to occur – perhaps a revisit of the 100-day SMA, which would be a juicy entry opportunity.