June 9 2022 Thursday Prep

Stats are mildly bearish.

Hence, I will short SPY 50@ open. If we bounce to close the gap, then I will scale in @ Y-L o Y-C depending on price action. If price goes above ONH, then my premise is wrong. In that case, I will scale out 1/2 and leave the rest to EOD.

If we race to the downside, then I will try to scale in during bounces to vwap.

I have to travel later today and hence may hold just 50% size.

June 9 update

Short 1/2 size @ open as per plan. Still holding and will till EOD.

Scaling in was a bit tricky. I wanted to fade Y-C and when the price came up, I was less confident. After seeing some weakness, I did scale in but scratched that due to stronger price action.

I have scaled in again after seeing the strength of bears with new LOD. I may scale out @ 4070 i.e below Tuesday's low, if we get there.

I also think there are lot of trapped bulls and this could go lot lower and tempted to carry the whole lot till EOD. In the less likely scenario of price going up and making a new high, I will scale out.

June 9 review.

Pleasantly surprised with such a big down move. Though I'm only 1/2 size short, not complaining.

As I posted earlier, I'm currently traveling with limited data access. I could have easily gone flat during the AM chop. Many excuses came to my mind. Rollover, chop, traveling, etc.

Instead of being risk averse, I was risk aware and stayed in the game. And got paid by Mr. Market. Will never forget this lesson.

End of the Day / Market on Close MOC order benefits


I was quite skeptical of End of the Day MOC orders before this pilot project. Obviously, I was worried about Mr.Market taking my paper profits if I don't exit manually 'at the optimum spot'.

So far it has been an eye opener. There is simply no way, I could have gotten out at a better spot than 4 PM EST Market closing time. Charts are simply stunning. May be it's an anomaly but looking @ the last 6 trading days in June made me speechless.

When I checked the stats, this is what I found. During Bear Markets, price tends to close in the top/bottom 25% of the daily range on 2/3 occasions. That's a pretty good odds for me. So the bottomline is this. If the trade is working, stay till the end of the day. Eventually I will stay till the end of the trend too by holding multiday swing positions. Project for next year once I see consistent results with intra-day trading.

June 10 2022 Friday prep

Due to traveling and poor data speed, I have limited access to prep and watching my trades.

Ideally I have to sit out but interested to see the overnight action and big gap down.

Stats are neutral or mildly bullish. Surprised, given the overall bearish feel.

Hence long SPY but only 1/4 size. Just to test my thesis. Low confidence overall but let's see.

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June 10 2022 Review

Followed my plan, with caution. Didn't work out. Small loss.

2 adjustments made today. Didn't enter long @ open as trend and momentum were still bearish and waited for 20 mins. Size was 1/4. EOD exit.

Though my preference was to short the market @ open, I wanted to follow the direction of the stats strictly with no exceptions for a month (ending next week).

Overall, quite happy with the execution.

Recap of this week.

Overall, very happy with the direction I am heading.

Not just because of the P&L of the last few weeks, but due to the reduced level of stress and the screen time associated with this methodology. It works well for my temperament too.

Most of my work/analysis happens BEFORE the market opens. After that, I'm mostly a spectator like watching a football/soccer match. It ebbs and flows but I made up mind, mostly, about my future action and very little to do during RTH.

I am strongly convinced, after reviewing stats for several months, that market is NOT completely random. It's simply crowd behaviour and has some predictability in certain conditions. My job is to identify those moments and try to maximize my gains.

Turnaround 2022

I traded intermittently, mostly as a part timer, from 2014 till 2020. I took this seriously last year with more hours into research and started trading full time just a month ago.

In the past, I was mostly focused on winning percentage, like most amateurs. I was able to get 65% and above quite comfortably most years. However, my winners were smaller than my losers (which includes occasional monster).

I decided to reverse that this year and glad to see this result from tradervue. (mind you this includes my half baked effort early this year).

I still take more shorts than longs but happy with better profit factor. Look at those gorgeous 'largest gain/loss' ratio.

This is from 1st of May, 2022 i.e. Since I started trading full-time.

Less discretionary trading and more systematic following statistical edge based on the last 20 years data.

Long Trades. . . . . . . . . . . . . . . . . . . . . . . . Vs . . . . . . . . . . . . . . . . . . Short Trades



Still fewer Longs (perhaps due to market condition) but better profit factor of 2.43 vs 1.40 for Shorts.

>2% Big down day stats

In the last 20 years, we had 2% down days on more than 250 occasions.

Overall, it's profitable to go long the following day. However, Market has different states/conditions and an interesting pattern emerges when I looked a bit deeper.

In a strong bull market, it's a 100% losing strategy! (happened only a handful of times though). In a week bull market, it happens lot more but again it's a losing strategy. PF 0.8

In a weak bear market, it begins to look more profitable @ PF @ 1.4 and in a strong bear market, it's quite profitable @ 1.6. Can anyone see the paradox?

Perhaps the common wisdoms 'BTFD' during Bull market is not that profitable and 'Catching a falling knife' during a bear market can be quite profitable. At least for the day after 2% down days and for day-traders who hold positions till EOD.

I think this is one of the fundamental reason why trading is difficult and even successful traders struggle @ times. The crowd behaviour is very different in different market conditions and it's not easy to adapt quickly or change one's trading strategy and mindset.