20dmf rt

[Riskslayer]

Hi Billy,

Thanks for the excellent explanation.

I am interested in potentially trying your approach, so I have tried to see if I could re-create the various aspects of the trade.

I am struggling with the first support cluster and related initial stop on the 2/3 position. I went back to the Forum Clusters 111115 file you published before the open on Nov 15, and I see the first support cluster on IWM as 70.36 to 72.63. Accordingly, the bottom of the first support cluster on IWM at 70.36 is 3.5% below the Nov 15 open of IWM (72.92).

Your above note seems to say that your TNA stop at 42.10 was +0.2% below first support cluster on TNA - this is only 5.4% below the TNA open at 44.49. I would have thought there would be more like an approximately 3X % difference between the IWM and TNA stops, i.e. the bottom of the first support cluster on TNA more like in the area of 3.5%*3 = 10.5% below the Nov 11 TNA open??

If I traded TNA based on IWM price triggers (which I can do in my IB account), than an IWM trigger just below 70.36 (the first support cluster bottom) would have resulted in a lower TNA price than 42.10, perhaps in the range of $40 and exposed such a trade to about twice the downside risk you are describing.

What am I missing?

Thanks,

Shawn

[Billy]

Hi Billy,

Thanks for the excellent explanation.

I am interested in potentially trying your approach, so I have tried to see if I could re-create the various aspects of the trade.

I am struggling with the first support cluster and related initial stop on the 2/3 position. I went back to the Forum Clusters 111115 file you published before the open on Nov 15, and I see the first support cluster on IWM as 70.36 to 72.63. Accordingly, the bottom of the first support cluster on IWM at 70.36 is 3.5% below the Nov 15 open of IWM (72.92).

Your above note seems to say that your TNA stop at 42.10 was +0.2% below first support cluster on TNA - this is only 5.4% below the TNA open at 44.49. I would have thought there would be more like an approximately 3X % difference between the IWM and TNA stops, i.e. the bottom of the first support cluster on TNA more like in the area of 3.5%*3 = 10.5% below the Nov 11 TNA open??

If I traded TNA based on IWM price triggers (which I can do in my IB account), than an IWM trigger just below 70.36 (the first support cluster bottom) would have resulted in a lower TNA price than 42.10, perhaps in the range of $40 and exposed such a trade to about twice the downside risk you are describing.

What am I missing?

Thanks,

Shawn

Shawn,
You are correct. There was a typo in my journal notes and the initial stop was 40.10. Thank you for noticing and for the feedback.
Billy