Jan 8th 2020 is not a day that I am particularly proud of: I violated my rules and almost blew up my account.
The background is a little complicated: Iran attacked US base in Iraq the night before and futures were down almost 2.5% at some point, and I thought there was no way they’ll bounce back and we might see a -3% day the next day. So I almost ready for scalping from the long side.
However in this wicked world we live in, Nasdaq opened green… I got up early and saw it, I go, how is this possible? Angrily puzzled, naturally I shorted NDX… and SPX, $10 spread and $5, then started my nightmare day, when /NQ is getting greener and greener, and my spread was fully in the money.
Then came the familiar feeling: I had to check the market every 10 second, I felt dizzy and defeated and wanted to close my eyes, and then I started to believe my trades had to work.
Finally I started to manage the position by selling put spread against it and I added to the short position, which at some point was tested too, when /NQ was up more than $100! My account lost almost 50% at the worst time, because my /CL and /GC positions started to go against me too.
Finally the option god heard my pray and the last 15 minutes the market started to reverse, however my $10 spread was closed under the water.
The daily scalp business continued to proved to be just gambling. However something I could do to improve? Stick to the plan!
- Do not scalp immediately after market opens.
- Wait for 1% move(in my defense, the market moved from -2.5% to +0.4% when I placed the trades)
- Do not go too big! Currently $10 spread is still too big for me, especially when other conditions are not ideal.
- Do not force emotional trades!