S&P 500 IndexShort
SPX medium-term trade idea - LETS MAKE SOME MONEY!
Updated
This is not financial advice - trade at your own risk
I think we are due for a correction and it is time to take advantage of it.
The 2850-3000 area is a significant Fibonacci level that played a critical role in significant corrections, rallies, and sell offs in the past two years.
I think the market can move in many ways, but I do believe that somewhere around the 3000 area, whether it is 2950,3000, or 3100, we are going to see at least a 5% correction. I am going to take advantage of it with SPXS.
Trading plan
What I know:
- Price is going to correct at least 10% between the 2900-3100 area
What I do not know:
- When
- Exactly by how much
So what how do I reconcile between what I know and what I don't? Scaling!
I am going to divide the capital I am dedicating to this trade to 5 equal portions.
Entry (white circles):
Oh yeah, smart guy? What if the price starts trending down before it hits 3000, 3050, or 3100, what then, huh? gotchu! you don't know how trade!
Simple: If I see momentum picking up downwards by looking at the 50MA's direction, RSI divergence, and volume easing down before these price targets are reached, then the portion of the highest target gets carried to the next lower portion. Portion 5, when the price crosses below the 50MA, can be considered the last portion. If at anytime the price crosses below the 50MA line on the 4 hour chart, then I will go all in.
Stop-loss: @ 3200
The 3100 area is another key level. If the price manages to penetrate it then I'm going to take the loss.
Exit (red circles):
My exit strategy will depend on how high the price gets before it starts trending downwards. Similar to my entry strategy, I am going to divide my exit strategy into 4 equal portions:
Similar to my entry strategy, if I see the price trending upwards at anytime, then the lowest portion gets moved to the highest nearest portion! If at anytime the price crosses below the 50MA line on the 4 hour chart, then I will sell everything.
Thank you for reading! Please let me know if you agree or disagree with me, why, and any suggestions you have to improve my trade.
I think we are due for a correction and it is time to take advantage of it.
The 2850-3000 area is a significant Fibonacci level that played a critical role in significant corrections, rallies, and sell offs in the past two years.
I think the market can move in many ways, but I do believe that somewhere around the 3000 area, whether it is 2950,3000, or 3100, we are going to see at least a 5% correction. I am going to take advantage of it with SPXS.
Trading plan
What I know:
- Price is going to correct at least 10% between the 2900-3100 area
What I do not know:
- When
- Exactly by how much
So what how do I reconcile between what I know and what I don't? Scaling!
I am going to divide the capital I am dedicating to this trade to 5 equal portions.
Entry (white circles):
- Portion 1: 2950
- Portion 2: 3000
- Portion 3: 3050
- Portion 4: 3100
- Portion 5: Price crosses 50MA
Oh yeah, smart guy? What if the price starts trending down before it hits 3000, 3050, or 3100, what then, huh? gotchu! you don't know how trade!
Simple: If I see momentum picking up downwards by looking at the 50MA's direction, RSI divergence, and volume easing down before these price targets are reached, then the portion of the highest target gets carried to the next lower portion. Portion 5, when the price crosses below the 50MA, can be considered the last portion. If at anytime the price crosses below the 50MA line on the 4 hour chart, then I will go all in.
Stop-loss: @ 3200
The 3100 area is another key level. If the price manages to penetrate it then I'm going to take the loss.
Exit (red circles):
My exit strategy will depend on how high the price gets before it starts trending downwards. Similar to my entry strategy, I am going to divide my exit strategy into 4 equal portions:
- Portion 1 (Only applies if price penetrates 3000 - not on chart): 2900
- Portion 2: 2730
- Portion 3: 2630
- Portion 4: Price crosses 50MA
Similar to my entry strategy, if I see the price trending upwards at anytime, then the lowest portion gets moved to the highest nearest portion! If at anytime the price crosses below the 50MA line on the 4 hour chart, then I will sell everything.
Thank you for reading! Please let me know if you agree or disagree with me, why, and any suggestions you have to improve my trade.
Note
I forgot to mention, my exit portions will not be as stringent as I will be using trailing stops as well. So it will depend on what the price reaches first, my trailing stop or my target exit price. Happy trading everyone!
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