From yesterday's post "One might worry this is the left half of an Evening Star presaging a down turn reversal.". Well guess what? It was. This could be a very bad indication for this trade. I was very tempted to close out the trade at break even.
Why didn't I? I'm afraid I'll be asking that question when I'm down big time. But I stayed in the trade because:
- We didn't close below the 8ema.
- Stochastics aren't overbought.
- The initial conditions for this trade were strongly bullish.
- I've seen many times where an Evening Star would close very near the 8ema then reverse back up.
- Today is the Friday after Thanksgiving and the "real" participants were probably not trading.
I re-entered the hedge trade, but since we went almost straight down, the Limit order never filled.
So we closed the day, with no hedge, almost precisely where we entered the original trade and watched what was once a 114.70 - 113.025 = 1.675 * $400/pt = $670 gain at the high 2 days ago disappear. Not fun.
Now we have to wait out the weekend and see if we get a reversal or a continuation. LE doesn't have overnight hours, so we have to wait for the 9:30am ET open. I look forward to a fantasy future when we have 24/7 markets for everything.
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