Anyone shorting the Dow Jones? pt 2

[carlosd]

Hi all. I am new to the forum.

I am also shorting the Dow. This is on a spread bet where I sold at 14084 on a Jan 13 contract.

Please see the following article which I think reply sums up the current picture.

A must read by Bob Farrell - former Merrill Lynch legend* - Blog - The e-magazine created especially for active spreadbetters & CFD traders

I hope you mean jun and 14484

 

[watkins]

We all know its going to come off after the FED. They will hint at reining in Qe or "tapering" as they call it and the market will hit the skids, i dont think it will be for very long but for a few days it will be a no bid market, remember volume has been tiny on the way up, and it will be large on the way down, look out below

Does anyone have any evidence (numbers/statistics/sources) that link FED tightening/easing with moves in the markets? While I don't question the notion that the FED printing money is a positive for an increase in market prices, I'd like to read some evidence of this iron clad law.

 

[kitbag1984]

Lol. Actually I did mean 14084. I am currently sitting on a loss of £110.

I did however make a mistake with the contract. It is jan 14.

The rise has slowed down last few days. Hopefully this will lead to a higher correction.

 

[Talbs!]

Does anyone have any evidence (numbers/statistics/sources) that link FED tightening/easing with moves in the markets? While I don't question the notion that the FED printing money is a positive for an increase in market prices, I'd like to read some evidence of this iron clad law.

There is loads of evidence of this on the web and also having sat at my screens watching it happen for the last 4 years, it makes sense cheap money needs to find a home, hence equities and bonds have gone bid.

 

[Fuzzybid]

you guys keep hoping while i keep scaling in to the longside also great stocks still cheap keep shorting only provides more fuel to this massive bullmarket kids

 

[Brumby]

Those who are holding short positions appear to be doing so based on hope. Problem is, one possible scenario in a terminal phase is a parabolic run - sufficient to take out all shorts before making that turn that all short holders are hoping and waiting for. Picking a top is always tricky business but still seems to be a common hobby.

 

[WR1]

Just a matter of when / not if

might just have yet more swap to pay for 1 more month, but is nt it said longer term traders often make more than day traders

the targets are down (somewhere) and very easy to spot on the charts
so more than worth holding on for

will this yr be different and the market never pulls back, probably not
after or mid through the earnings the market will drop to one of the targets
after that im sure we can all make our assumptions when the bigger pullback will be, so would rather scale in now for the falls - and not scale in long for the final push up
besides its quite easy to play both sides, but not for too much longer (imo)

 

[BigBootyBabe]

I am a reversal/snap-back specialist trader.

Have generated around 120% return over the last 3weeks (all trades live-called in my journal) by selling into this market at these extremely vunerable (over-elongated) level.

My 1st and most important advice to everyone else trying to do the same is DO NOT limit yourself to just selling the dow!
Instead sell the dow through other more structurally weak markets (dax/oil/cac/ftse/aud:cad) when they are appropriately priced,
as this is an extremely safer and more benefit method since these markets ALL tank when dow does (by more % than the dow), they ALSO have other bearish fundamentals that can smack them down even when dow is rising, and they all rally by lower % than the dow rises (cac being exception so be vary of cac).


Do not be scared of selling the dow at this 14,500 level though,
the only 2 tricks are to SCALE-IN and BE PATIENT!

1stly decide what amount of pounds per pip you want to short it at and where on the upside you want to place your stoploss,
2ndly slash trade size to half but double your stoploss (so you're risked capital amount remains exactly the same but you get double the time and lee-way),
and 3rdly dont set ridiculously huge targets 200-400pips, instead scale down the market collecting 60-95pips profit, exit and wait for it to bounce back, the once a top formation is re-formed re-sell and slice another 80points out.



Im currently short from entry level 14,496 (wasn't a good entry),
so 2/3 of trade is set to cash in at 14,462 with remaining 1/3 going to be trailed-down and cashed in between 14,325/14,419.

 

[Fuzzybid]

suckers game lolwhat whe have now whe had fiscal cliff ooh yeah who cares cypruss who cares and now bad ism who cares

 

[malaguti]

suckers game lolwhat whe have now whe had fiscal cliff ooh yeah who cares cypruss who cares and now bad ism who cares

if you stopped typing with your toes we may care....

 

[Moneylender]

I am a reversal/snap-back specialist trader.

"Im currently short from entry level 14,496 (wasn't a good entry),
so 2/3 of trade is set to cash in at 14,462 with remaining 1/3 going to be trailed-down and cashed in between 14,325/14,419.[/QUOTE]

Are those entries correct, Dow is currently close to 14600?

 

[BigBootyBabe]

"Im currently short from entry level 14,496 (wasn't a good entry),
so 2/3 of trade is set to cash in at 14,462 with remaining 1/3 going to be trailed-down and cashed in between 14,325/14,419.

Are those entries correct, Dow is currently close to 14600?[/QUOTE]


Yes those numbers are all correct.
(Like i said this wasn't a good entry)


Market is currently at 14,550 (so merely 0.3% of market move against me).

Market did have a range today of 14,520/14,600 though, however as today was easter and so all markets apart from USA was closed there was virtually no volume and so i didn't even bother monitoring the market today.


You need to remember that now that dow is at 14,500 a 100point move is no longer 'big' like it used to be when dow was under 11k. :innocent:

A 100points move is merely 0.75% of market move now for dow,
and so to deal with this ive just cut my £ per point size down a moderate amount since the daily range and moves are going to now be alot more points so need less value per each point.

 

[carlosd]

Are those entries correct, Dow is currently close to 14600?

Yes those numbers are all correct.
(Like i said this wasn't a good entry)


Market is currently at 14,550 (so merely 0.3% of market move against me).

Market did have a range today of 14,520/14,600 though, however as today was easter and so all markets apart from USA was closed there was virtually no volume and so i didn't even bother monitoring the market today.


You need to remember that now that dow is at 14,500 a 100point move is no longer 'big' like it used to be when dow was under 11k. :innocent:

A 100points move is merely 0.75% of market move now for dow,
and so to deal with this ive just cut my £ per point size down a moderate amount since the daily range and moves are going to now be alot more points so need less value per each point. [/QUOTE]

100 point move against you is still a 100 point move against you if the market is at 15000 or 10000.

What a 100 point move equates to in market percentages is irrelevant, it's still a 100 point loss until the market turns or your stop is hit.

 

[BigBootyBabe]

100 point move against you is still a 100 point move against you if the market is at 15000 or 10000.

What a 100 point move equates to in market percentages is irrelevant, it's still a 100 point loss until the market turns or your stop is hit.

Yes but the number of 'points' is almost irrelevant when it comes
to measuring the size and scope of market moves,
its percentage that matters.

As a 100points move that is only 0.4% of market will happen extremely frequently compared to if that 100points move would mean a 2% move.


Added my 2nd 1/3 of sells in at 14,675 btw,
and so have my final 1/3 waiting to go in if market gets above 14,800.

Target has been adjusted on the downside to 14,536 and 14,475 though.

 

[hotshot12]

Don't be a square. 80% of the public are short the Dow which means (depending on ure timeframe) BUY ALL DIPS.

If NFPs come weak on Friday, BUY the dip.

The public is always wrong...

Well theyre wrong enough of the time to make it profitable to bet against them.

 

[Fuzzybid]

if you stopped typing with your toes we may care....

dow 20.000

 

[BigBootyBabe]

Added my 2nd 1/3 of sells in at 14,675 btw,
and so have my final 1/3 waiting to go in if market gets above 14,800.

Target has been adjusted on the downside to 14,536 and 14,475 though.

Have set that 2nd batch of trades to be cashed in at 14,603 (72points profit),
with the original batch gna be allowed to run-on to 14,536 for a smallish loss. :smart:

 

[BigBootyBabe]

Have set that 2nd batch of trades to be cashed in at 14,603 (72points profit),
with the original batch gna be allowed to run-on to 14,536 for a smallish loss. :smart:

Have just cashed in my 2nd batch of Dow shorts at 14,603 (72points profit),
with the original batch gna be allowed to run-on to 14,536 for a smallish loss.

Will endup being a small net profit overall though.

As posted previously this trade was cashed in by limit-order at 14,533 (got 2points slippage in my favour) for a loss of 38points (£114).

But so overall ive still endedup making a net profit of £30 on this Dow trading though (due to some extremely brilliant crisis-management trading by me).


Gna be looking to re-sell Dow at above 14,680.

 

[kitbag1984]

Well I am around £250 down at the moment having sold at 14084.

Have we now seen the top?

Will the N Korean rambling effect the market in any meaningful way? True the Dow is heavily shorted right now but with the Korean thing and the problems with cypress I think it will only take a few earnings misses to bring the Dow down even further and due to the oversold nature I think there will be a large SnapBack.

Big booty babe. You clearly know what you are doing but would it not be more prudent to reset your stop loss when in profit? Eg if you sold at 14500 and the market came down to 14250. My thought process would be to set my loss at 14400. Thereby keeping the trade open. Eliminating any risk with (hopefully) profit on the upside.

Could even hedge your position at that stage. I am a relative newbie so your thoughts are appreciated.

 

[BigBootyBabe]

Well I am around £250 down at the moment having sold at 14084.

Have we now seen the top?

Will the N Korean rambling effect the market in any meaningful way? True the Dow is heavily shorted right now but with the Korean thing and the problems with cypress I think it will only take a few earnings misses to bring the Dow down even further and due to the oversold nature I think there will be a large SnapBack.

Big booty babe. You clearly know what you are doing but would it not be more prudent to reset your stop loss when in profit? Eg if you sold at 14500 and the market came down to 14250. My thought process would be to set my loss at 14400. Thereby keeping the trade open. Eliminating any risk with (hopefully) profit on the upside.

Could even hedge your position at that stage. I am a relative newbie so your thoughts are appreciated.

Heya hun, i will try and help you out with your trade.

Thankfully your loss is still very small in money terms, which is beneficial.
How much capital do you have in your account though:?:

For my example i going to just work on the basis that you currently have £1,000 capital, £250 open-loss, approx £150 reserved as margin, and so £600 remaining capital to use as you weapon.
If you have more than 1k capital please let me know asap and we can then work with the exact amount you have.


Your 1st entry has turned-out to be very bad,
and so this trade now needs to go into damage-limitation mode.

Your next step is that we now need to ''trap the dow'' so that it cannot move in either direction without that being positive for you.


Your current ammo is-

*£600 (or whatever capital you have to use).
*Time on your side, as you can sit and wait for far longer than other traders who will get very scared of losing their open-profits/scared of missing the crash of this rally and so start selling into it.
*A chart of the dow where you can see what the support&resistance levels are.
*Plus you know inadvance what time economic numbers are gna be released that will have big-impact on the dow (Forex Calendar @ Forex Factory).


I have attached a chart showing what the dow has done from the start of the year,
and so show that its risen nearly 2,000points without a snap-back,
which means that a pull-back will come,
however also means that despite how much bad news has come out that the market has now tanked on it means that NOTHING WILL SHOCK this market.

So i dont think it will be a very steep sharp snap-back tbh,
i instead think the market will just float and grind lower at a moderately slow pace, float sideways, and then rise and move in a range for a few weeks.

And so if i was you the exit level i would be looking for would be 14,325 or 14,406.