Trading journal – 2nd December

DXZ18 – price is coming off after a positive few days, Powell’s dovish comments and probably could be expected to weaken further following the America China tariff pause.

GCG19 – the G20 agreement (between America and China also means risk on settings for gold, can expect weakness until the next Trump mis-step.

KCH19 – the downtrend resumes with the target still 98.55

ZWH19 – still sideways

CCH19 – rallying from 2100 for now. Nothing for me to do.

SBH19 – trying to go higher but failing for now.

HGZ18 – still nothing.

ZSF19 – looks like another test of 900 is coming. The shorter term averages are coming together so it would seem a good bet to buy soon on a break of 900 with the target at 940 and a stop just below the low on a break above 900.

ZMF19 – nothing

ZOH19 – hard to read, have to wait.

RSF19 – bounced of the 470 level so I’m just going to continue to watch for now. Might get a chance to sell when it tries to push through the 40 day moving average.

DYZ18 – it hasn’t bounced as far as I would have hoped so I’m probably just going to wait for now.

ESZ18 – I made a bad call on my risk management and got too large in this position, based on being excited about being right. I realised thinking about ‘how much is too much?’ that I’m comfortable with about 2-3% risk to my portfolio per trade. I sold two calls to try and get more leverage out of my short equity view, one at the money (2735) and the other very deep in the money (2630). The at the money call was probably the better trade of the two because that was almost all extrinsic value when I put the trade on. The option premium was 30.75 in points, so the contract can be up to 2765 at expiry and I’m just flat. I knew volatility was high, I had a negative view, we were approaching a previous high and the previous day’s candle showed indecision. The other short call position had much more intrinsic value and I had confused my rationale about why to buy it, after looking at deep out of the money puts and thinking they’re overpriced so therefore the opposite must be underpriced. The price is right up against the 200 day moving average, which is currently at 2769 and the 40 day moving average has been a good selling zone, where previously it was a good buying zone (usually up to 2% above the 40 day has been a good sell zone). So plan is to get out of the deep in the money call at the open and then watch the second to expiry on the 5th of December. I’m almost tempted to go long the underlying contract as a hedge against the volatility and try to take it off when momentum slows. It does feel like compounding the error though. Better to accept the loss and get out with the first price.

NQZ18 – “All I need now is Trump to disappoint in Buenos Aires” and that’s just when you know you’re positioned wrong… still thinking we will get a negative outcome in equities but will have to watch carefully for the open in case there’s a lot of buyers waiting to crush the shorts. In the charts it was another relatively weak session but one that in a neutral circumstance I would assume it building to break higher looking at the last 10 sessions… or about to sell off based on the last 40 sessions (lower highs and lower lows). Also all the 6 highest volume sessions in the last 3 months were red (i.e. closed lower than they opened) but that is just me comforting myself about the position. Have to focus on individual trade riskmanagement.

LSF19 – waiting on 300

CTH19 – nothing on cotton for now, support around 77 has worked well twice now.

OJF19 – waiting to see if the bounce has legs.

SIF19 – waiting for 14.

PLF19 – didn’t get a position on this one, the horse has bolted for now. Wait for a follow-up theme.

VIZ18 – lower again and now a lower high than the previous High near 22.

Actions required as a result of today’s journal
– watch the open on U.S. equities for the move to the 200 day moving average.

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