Reversals, Reversals, Reversals

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Friday was a very difficult trading day because the market reversed so many times. Into the Close the market reversed four times. I usually get caught in one reversal a week. I got caught in eight yesterday. I would make a bunch of profitable trades and then a stock would reverse. I got caught in the SPY upmove midday from 94 to 98. It is easy to look back at the intraday chart and see that 94 was support. But I didn’t see that move coming. I was pretty loaded playing for a breakdown of SPY below 94, when SPY ticked below 94, and before the 4 point upmove. Ouch. I certainly can think of better ways to spend my lunch hour than losing 2k midday eating Pump and getting creamed in SPY.

I actually made money trading AAPL today despite its ten reversals. Yes you read that correctly ten intraday reversals. But again I made a bunch of good trades in AAPL and then got killed in a few reversals. I know I said,” not sure where that move came from,” a few times yesterday. And I chuckled at the absurdity of the multiple reversals on more than one occasion.

Hey I don’t mind taking a rip here and there. But boy was yesterday frustrating. Low volume moves followed by reversals. High volume moves followed by low volume reversals. I am all for fast moving, crazy markets but today was difficult. It is hard to make money with all these reversals when you have recently been trend trading. If you are a trend trader then reversals are your kryptonite. It is hard to intraday adjust your trading to fading moves when for the past 18 months stocks have been explosive and directional.

After the Close, I told our desk not to worry about any rips today. It was just such a strange trading day. You just don’t see the market reverse so many times like we did on Friday.

As I write I am in the office, ripping through some charts, and watching some film. I will spend some time considering why we reversed so many times. I will search for a few articles that might help.

Anyway, I am not sure what to say about yesterday except that I am glad it is over. And I am looking forward to going back to work on Monday and trading better.

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