No registration required! (Why?)

Do you think this is gambling?


I am unable to trade tomorrow and have taken a position short in the overnight from 1462.50.....my initial target is 1458.50....( High Volume area in overnight)...the weekly pivot is 1464. I have an alert set at 1469 but have no official stoploss in place...yet!!

This trade is based on the weekly pivot as a resistance area and the following...

If the futures close at a discount to the cash then a gap up SHOULD be met with some selling....ok enough of the background..

Do you think this is a gamble trade?

I'd be curious to hear some thoughts regarding gambling/edges and stops...

Bruce



Here is the area I'm watching....for those familiar with the Pitbull thread you will know why this area is an interesting zone...This chart also shows the decline after hitting the weekly pivot in the overnight up at the 64 area...there is a problem in that this trade has almost 3 points of open equity as I type ( market is at 59.75) so some contracts should come off now and will...

there is a point of diminishing returns where the risk to get to the final target is much greater then the reward...I.e. at a price of 59.50 I'm trying to capture only 1 point of additional profit.( down to 58.50 target)...so risking anything more than one point isn't cost effective...

the fact that this initially had no stop has me leaning on the side of a "gamble" trade.....to me this is no different then occasionally taking a "long shot" on a deep out of the money put or call option...the point of this is that I am trying to get some feedback on what would make this particular trade a gamble in your opinion....for some it maybe that it's the overnight session or the fact that you may think the edge isn't there or perhaps no stop initially...just curious and I'm rambling

Click image for original size
No Description Entered
Hello Bruce,

Well ES has hit the 1464 area and going down as of 12:54 am Aug 13..but ER has not hit the 780-771 range. So we maybe can use the ER point and trade ES accordingly....a complete switch to norm.

My feeling is we are going down tommorrow in morn early aft...and when everybody thinks its going down...we going up...

Aug 16/17 should be in high are...not necessarily new highs but high area.

ES range last week...1510.50-1432 and ER was 807.20-744.70...last high 804

good luck

Based on the lack of a specific plan to control the trade if the market moves against you, I vote for a gamble...

Hope for your sake the Fed doesn't decide to toss a rate cut at your position today...
I have some free time and agree with the gambler assesment..I was able to make good on this but runners got stopped....I'm now short 71.00 looking for 1465 as I feel the pull of gap and weekly pivot will get there....for the record I wanted to quote what I did ..so initially this was a gambler trade but moving stops down helped relieive that. This doesn't change the initial gamble though......don't want to see new highs...
quote:
Originally posted by BruceM

3 points of open equity as I type ( market is at 59.75) so some contracts should come off now and will...




quote:
Originally posted by BruceM


If the futures close at a discount to the cash then a gap up SHOULD be met with some selling....




Congrat's you initial premise was satisfied !

Unfortunately we have not seen a precipitous rejection off the morning highs. Raising the question given this slow drift off the morning highs on low volume what happens next ?

The old adage... never short a dull market .... comes to mind.
Thanks Pt_emini but I want to apologize for taking this off topic. The ego comes into trading and at times posts made to forums...I am guilty of this but wanted to show something as it was happening...

I wanted to bring out the fact as you said that without a stop loss or the ability to act and re-act quickly by watching the market then it's just gambling even when you feel you have an edge. I don't usually trade in overnight. So this was even riskier in my opinion.

Some key points to sum up from the technical side of this trade:

1)The markets attraction to the weekly pivot
2) The markets ability to travel in the direction of the previous close, especially true with these additional filters...

a) If the futures close at a discount to cash then selling the higher gap open or looking for shorts in general in early trade is prefered

b) If the futures close at a premium to cash then buying a lower open or looking for longs is prefered..


So today we had a higher open and the futures closed 10 points below the cash. The weekly pivot sat at 1464....so short was the way for me...
Now this seems like a choppy day so selling rallies seems to be a good idea but I'd be concerned on short side only if the 74 -76 area is approached

Bruce