Thursday, June 11, 2009

Why I got out

Here is a five minute chart of today's e-mini day session. My range estimate is still 935-960. If so, why did I just sell my entire long position?

Well, the answer has to do with the risks involved with staying with the long position. After I wrote the last post I saw that I had miscalculated the location of the last two highs in the September contract. They actually stand at the levels of the red dashed line in this chart.

As the market reached these levels I was expecting it to break out above them on good volume. This still may happen later today. But in the event I saw two high volume bars right at the highs that made no net progress (red arrows). After the market showed a tendency to settle back I sold my longs. I didn't want to accept the risk that a good profit would disappear, especially after yesterday's hard knock to my PNL for the month. As a rule I have found it wise to accept a profit if there is reason to do so instead of hoping for an even bigger one.

2 comments:

ARJ said...

Congratulation for the nice profit - Carl!

stacy said...

Every day, day in, day out, stuck in a range.