I took a short WHR position as soon as I noticed that the volume was above the average of the past day.
Pascal
I took a short WHR position as soon as I noticed that the volume was above the average of the past day.
Pascal
Pascal
Today being FOMC rate outlook day was expected to be very volatile. So the calculations for probability of both hitting the entry price at 77% and hitting the stop before reaching the target at 47% was not applicable under today's condition. We hit both the entry price and the stop in a span of couple of hours because of extremely high volatility today. So I guess that while the average calculations for normal calculations are fine, we should have avoided this trade at least today.
Thanks
Your analysis is 100% correct when you only look at this trade.
However, I am managing a five positions portfolio and wanted to stay long with my two positions going into FOMC.
Hence, the WHR short trade was a hedge against the two long positions. WHR is a big-ticket item company, which means that it would react to an interest rate change.
This means that it was a good hedge against the two long positions.
I saw it bouncing from the low before the FOMC announcement, but waited for the FOMC before closing the position. I think that this was a good trade in the framework of the Portfolio.
I also closed the two long trades in strength at the end of the day.
Pascal
You can see that I closed the trade 4 minutes after FOMC (Time shown is Brussels time)
Thanks for the background information.
It has been a good lesson learnt on how to play a FOMC day.