I accidentally wiped out my NinjaTrader installation on my VPS this morning and am waiting for the weekend backup to be restored. Per the hosting company it’ll happen sometime during trading hours today. So no new setups today as all my charts are in deep freeze right now. In the meantime I thought it may be a good idea to go over some basic risk management concepts that, judging by the comment stream yesterday, may bode repeating:
The Dollar is easing back a little this morning which in theory should be a welcome reprieve for equity bulls. However over in the real world I’m not seeing much of a response except for the Russell 2000, which is a bit disconcerting given last week’s VIX Sell Signal which remains valid until about Wednesday this week.
So I was catching up with the E-Mini campaign this morning and suddenly experienced a bit of an epiphany. Looking at the daily panel I suddenly asked myself ‘what the hell are you doing?’
Now don’t get me wrong, I’m not exactly unhappy regarding the fact that I was able to somehow squeeze out 4R+ in profits since the < 2600 lows early this month. But why do I keep expecting a directional move while we remain trapped in a sideways churn?
So the other day the VIX issued a sell signal, which is to be understood relative to equities and not the VIX itself. Which means after a sell signal you either go long the VIX or short equities, and it’s the other way around for buy signals, which by the way have been the norm over the past eight/nine years. In case you require a reminder as to the rules: