Buy Buy Buy - Day 2 of 6 - SPX and the Gap Area
Gann said divide your capital into 10 equal parts, never risk more than 10%.
When trading these cycles, I use a different approach than Gann and use a Poker Hand/Bankroll Management style of approach in that I will divide my capital into 1/20 to 1/32 pieces (roughly 3%-5% pieces) and scale in.
Example: For this window I am dividing my capital into 25 pieces and the cycle low window is 6 days wide (May 16-23 - 6 trading days)
Chunking up the bankroll I should then buy roughly 4-5 pieces a day. I began my scale yesterday buying a few more of about 8 pieces (17 left) and will buy 5-6 more today (12 +/- left). As long as conditions are acting right, by next Monday hope to be fully invested long. The great thing about this approach is that if am wrong and catch it early, I can throw this trade into the muck with less capital risked and move onto the next trade. If right, averaged in at good prices with maximum confidence. This is much like playing a poker hand.
SPX now appears it likes the Gap area after all and my style of trading I have powder dry to continue to buy more dips. Also have the ability to abort more buys if something unexpected occurs. As it stands now, market is acting well and constructive for a low this week.
When trading these cycles, I use a different approach than Gann and use a Poker Hand/Bankroll Management style of approach in that I will divide my capital into 1/20 to 1/32 pieces (roughly 3%-5% pieces) and scale in.
Example: For this window I am dividing my capital into 25 pieces and the cycle low window is 6 days wide (May 16-23 - 6 trading days)
Chunking up the bankroll I should then buy roughly 4-5 pieces a day. I began my scale yesterday buying a few more of about 8 pieces (17 left) and will buy 5-6 more today (12 +/- left). As long as conditions are acting right, by next Monday hope to be fully invested long. The great thing about this approach is that if am wrong and catch it early, I can throw this trade into the muck with less capital risked and move onto the next trade. If right, averaged in at good prices with maximum confidence. This is much like playing a poker hand.
SPX now appears it likes the Gap area after all and my style of trading I have powder dry to continue to buy more dips. Also have the ability to abort more buys if something unexpected occurs. As it stands now, market is acting well and constructive for a low this week.
posted by chartblog at
11:24 AM
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