Seeing as the market has decided to slide rather than continue a never ending charge to the sky's that would have been nice - but perhaps overly optimistic I thought I would dip my toe into index trading.
Now I figure it will go up down or sideways - I think that covers all options. Can it do something else?
It wobbles up and down about 10 points while deciding to go up down or sideways - OK so that means use a 10 point stop - any less and I will get hit while it makes up its mind.
So just in case it goes up we put a long a little above the price - and just in case it goes down we put a short a bit below the price - outside the wiggle range.
The only thing I don't want is it to wiggle up and pick up the long, wiggle down stop out - pick up the short then wiggle up and stop out again - apart from that contingency it's profitable on all legs.
In other words I have covered the chance it will go up and I have covered the chance it goes down and I have made allowance for wiggle room. What have I missed?
Liquidity can't be a problem. Indexes don't go into halts and never come out like some of my more famous ** cough cough Tamaya cough ** picks.
Have I missed something or have I been staring at the money cow all these years and not recognized it?
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