What causes muddy time and how did we trade it?
Phase 1: IT top around SPX 128x
Done. Closed IT long position with decent profit.
What's next? IT top reached way faster than scheduled - muddy time on
Phase 2: Trading with muddy time
As I warned, picking the exact top with muddy moves is extremely difficult.
Make your bet and be patient. - Done. I was underwater at times, but sit tight. Double sized position (not recommended - it just happened that way).
Don't lose money by nitty gitty moves. - Done. Sitting tight without hard stop (not recommended either).
Take profit when the sudden selloff comes. - Done with step 1, waiting for step 2
Phase 3: Fake time
Out of muddy time, we should have some fast move to one direction with conflicting VST & ST moves. It may feel like continuation of muddy time, but you will see the different outcome after it happens. Obviously trading style should be different. You are here.
Phase 4: The final Destination
More this later.
You are in Phase 3 - and this is what phase 3 is supposed to look like.
