Re: Sitting Out/ High Speed Evasive Driving/ White Belt Rules newSubmitted by 2nd_ave (4805 comments) on Wed, 10/20/2010 - 12:01 #72221 (in reply to #72209)
The FBI offers courses on tactical driving techniques. This blog really offers the same for traders.
In the 5+ years I've been reading/posting here, I've learned enough to keep myself out of trouble.
There's a ritual for beginning karate students- complaining about having to learn how to fall when all they want is to learn how to deliver a blow.
I would summarize the White Belt Rules as:
(a) Take losses quickly. Aka capital preservation. Aka making a U-turn immediately, rather than continuing down the wrong road.
(b) See above.
(c) See above.
(d) See above.
(z) Usually by the time you get to (z), if you get to (z), you'll have gotten it!
CP- I just don't want to see you down in the dumps in a few days. Take the gains, man. Odds are good you'll get great reentry prices.
ReplyDeleteOkay, I'll take some GMO off IF it hits a new high before the Beige book release.
ReplyDeleteOtherwise I'll make a decision based on the response to the beige book.
Just trying to formulate a strategy, does this make any kind of sense (spoken in an encouraging tone)?
CP- It's encouraging that you're even considering it. Remind yourself what happened the last time you left it all on the table at an interim 'top.' I don't think you want to go through that again? In fact, screw the beige book- just sell it all now, while they can't wait to take it off your hands. I can almost guarantee it will be a great move...
ReplyDeleteBesides, a day like today makes up for at least 10 days of bitter disappointment. ;)
ReplyDeleteVXX at a new alltime low. I added to my short VXX yesterday at 14.35. Had a little anxiety, but this thing is built to go to zero and I plan on going down with it.
ReplyDeleteBob
It's just a stock, man. The only 'strategy' you need is to sell if for a terrific gain. You have a terrific gain looking at you right now. Am I missing anything?
ReplyDelete(You don't want to end up like RoBear- going down with VXX ;) We're both kidding, of course, but if GMO starts selling off in an hour/tomorrow, it will be no joke. And my suggestion to sell it all right now is no joke!
GMO - cp FWIW, I mainly trade off of MMA & StochRSI, SRSI can only stay > 0.8 for so long. Same with SPX...
ReplyDeletehttp://www.screencast.com/t/h9TRzDspO2S
If it jumps to 5 tomorrow, so what? We all know pigs get slaughtered.
ReplyDeleteLook at REDF- that's GMO coming down in a few days from the buying binge...
ReplyDeleteThere's something strange about today's rally- +159 after yesterday's -165.
ReplyDeleteI just don't trust this kind of action.
(Did I forget to suggest that CP **sell** the GMO? Making money in the markets is NOT EASY. Take the gain! Remember that scene in Platoon where Tom Berenger puts his hand over the mouth of a newly-wounded soldier writhing on the ground as the Viet Cong advance towards them to finish them off- TAKE THE GAIN!)
CP- In fact, that's my advice right now for ANY longs-
ReplyDeletehttp://tinyurl.com/2abdm7o
CP, 2nd, Although 10% pop in one day is a big move. It is possible that giving up a position now may be a mistake. I know nothing about GMO, but looking from a momentum trading stand point. It has a lot of air above 4.50. $7.00 is the next serious resistance. I'm not saying it will be there tomorrow, but in a months time who knows. Maybe a sell half and trail a stop might be a prudent move. We all know how hard it is to hop on a train once it leaves the station.
ReplyDeleteBob
Oh no, not Youtube, those are too fat for my bandwidth.
ReplyDeleteAnyway, I'm reasonably convinced GMO will trade over $5.00 prior to end of year assuming the market doesn't come crashing down.
Anyway - okay, so I just finished entering an order to shed some GMO, it took a few minutes.
Now if it hits, I'll try not to go Neanderthal (more like Jurassic, but you get the picture). LOL!
Wow, CP - you're getting some serious pressure to sell! I don't want to influence you because I have no opinion of GMO.
ReplyDeleteI do, however, have an opinion on the markets. While I think a lot of people are fearful of a repeat of the late April action, which saw a lot of volatility before ultimately dropping, I think its too early to make that conclusion. If we see several days / week or two of see saw action then I agree it's probably getting close to a short term top. It seems that near the highs and lows we get this wild see saw action. It's definitely possible that is happening right now. I personally don't think so...yet.
By the way, CREE has steadily climbed higher all day. I wouldn't be shocked to see it close green.
45 minutes till Apollo 13 lift-off...
ReplyDeleteRe: Sitting Out/ High Speed Evasive Driving/ White Belt Rules newSubmitted by 2nd_ave (4808 comments) on Wed, 10/20/2010 - 13:07 #72237 (in reply to #72233)
ReplyDeletewestcoaster- Yeah, I think that's the right attitude. Where would we be if we all gave up the first time we tried out for freshman football, or if we walked off the field after a pass interception? The real winners are those who use early failures/mistakes to motivate themselves into becoming exceptional players.
TOF - Pressure is good, GMO begins mine construction this summer so no worries concerning final destination... This would only be a scalp for a (hopefully) lower re-entry.
ReplyDeleteNothing goes straight up.
VXX - interesting DBottom @ 13.77
ReplyDeleteTZA @ 22.47 newSubmitted by 2nd_ave (4809 comments) on Wed, 10/20/2010 - 13:15 #72238
ReplyDeleteFamous last words, maybe. There's just something wrong with today's rally. Let me rephrase that- it's just not right. Is it really as easy as selling off the dollar, or should we be 'working' a little harder at backing and filling?
I am glad that, just like 2nd_ave, I learned not to be too stubborn in my opinions and set stops for all the shorts I opened on Monday. Two of the three stops were hit already:
ReplyDelete- At $95 for the 100 shares of FCX I shorted at $97
- At $16.03 for the 400 shares of TWM I purchased at $16.04 (leaving me with just a minor gain on the IWM short, which I was holding before I switched into TWM).
The November $35 calls on USO I picked up yesterday are up by almost 50%...
It is difficult to make money on the short side during a crazy rally like we are having since September, but it looks like I was able to take a bite out of it. :)
My total portfolio was down yesterday and it is up today by a much larger amount, so apparently I didn't come even close to making my portfolio net short on Monday -- I have simply increased the hedges for my longs and took off those hedges today with some profit. The rest of my long portfolio keeps powering up. :)
David- What's your take on GMO? Should CP hold/sell/sell half?
ReplyDeleteI didn't expect $USD to sell-off so hard the day after it finally started rallying. Given its hugely oversold condition, I thought it should continue rallying at least until 79 and stay there for at least a couple of weeks. Maybe 2nd_ave is right and this rally in stocks will fizzle by EOD and $USD will reverse higher. If not, then the Fed is playing an amazing and unnatural game, and the market will indeed keep going higher until the November elections (maybe the Fed was INSTRUCTED to keep powering the market up until the elections, which is totally possible).
ReplyDeleteIt's only October 20. If the Fed wants to time the rally correctly, it needs to slow things down. Nothing worse than taking it up now, only to have it sell off just prior to elections.
ReplyDelete"David- What's your take on GMO? Should CP hold/sell/sell half?"
ReplyDeleteSince CP is watching the market for the whole day, then I think he should set a stop under it at $4.30 and then if that stop is hit and GMO starts going up again, he should re-enter at $4.35.
Alexander Elder, in his classic trading book, is suggesting that traders should ALWAYS place stops, and then they should feel no shame at re-entering if they are faked out. He explicitly said that amateurs (which don't yet have a full control of their emotions) tend to stay out once they are stopped out, but the pros, on the other hand, are above "shame" and the feeling of "not being lucky" -- they are just doing their job.
Such a strategy will make sure that CP will not lose his current big gains if GMO turns down and will also not miss the continued upside to $5 if GMO keeps powering up. If GMO keeps going up, then CP should keep moving his stop up, ideally placing it just outside the range of the daily noise.
2nd - Ballsy call on the TZA trade...although I think you could do well as the high risk stocks I follow seem to be losing steam.
ReplyDeleteFor you BYD followers:
ReplyDeletehttp://xml.10kwizard.com/filing_raw.php?repo=tenk&ipage=7195071
GMO - there's your 4.30 break...may reverse
ReplyDeleteTWM seems to have made a nice curved bottom intraday at $15.90. So I just picked up 500 shares at $16.04, same price at which I got stopped out of my 400 shares earlier today. Setting a stop at $15.84, just a little below the $15.88 low made by TWM so far today. This gives me a maximum loss of $100 on this trade, which is small relative to the potential gains (i.e., if TWM has indeed seen THE low for the day, then I will likely earn at least 2X or maybe even 3X of my potential loss amount).
ReplyDeleteChicken schnitzeled:)
ReplyDeleteAfter a little thinking I figured that $100 maximum loss is too small of a loss for me. :) I would rather make it $200! :)) So I just bought 500 more shares of TWM at $16.02 and added them into my stop at $15.84.
ReplyDeleteshark - How u feeling man????
ReplyDeleteouch, Dutch pounded my ass for moving off sim into live trade for the /es and /ym....but hell, I made good $$$ today. I moved 75% of my 30% cash position over to Infinity Futures, now all I need to do is carve out about $3k profit per month and I'm solid.
ReplyDeleteanyone else here actively trade futes?
Yea, so what's new? Actually, I'm beginning to suspect some of the GMO volatility may be related to the rare earth hype in that some misinformed soles are confusing General Moly for Moly Corp?
ReplyDeleteWhere's the schnitzel?
Err - souls that is, not talkin' about beating feet quite yet.
ReplyDeleteLooks like I'll get what I asked for -- a $200 stop loss on TWM instead of a $100 stop loss. :)
ReplyDeleteBusy...Watching HERO for an entry.
ReplyDeleteTOF- I'd be puking :)
ReplyDeleteDavid- Your comment about the last 2 days are exactly what happened to me. That's why cash is so important. If I had been really long I would have gotten killed. As it was, I was able to add and open 4 positions. Yesterday my total port was down .68%. Today, up 2.33% and I raised cash from this morning.
HERO - you think 2.25 holds???
ReplyDeleteGMO- CP, I agree with 2nd...Kinda. Just be careful and don't go back down the rat hole. You've killed this one man. Thanks for the ride. I've taken it 4 times now.
ReplyDeleteKyle- Funny...2.25 is the # I'm looking at. That was the day the huge puts were bought to ofset a huge block order.
ReplyDeleteMI - just a little red today
ReplyDeleteVXX - so much for the db @ 13.77...
ReplyDeleteTiny gap in SPY @ 119.18???
ReplyDelete"Alexander Elder, in his classic trading book, is suggesting that traders should ALWAYS place stops, and then they should feel no shame at re-entering if they are faked out."
ReplyDeleteAnd then there are the guys who were stopped out of TGB this week who are questioning the idea.
Today's modern definition of classic?
This has to be the longest time I've spent waiting for a tight intraday stop to be hit! Usually it gets hit before I finish typing the post about my entry into the trade. :)
ReplyDeleteCP, Elder deals with average outcomes, and when you open a position, you should expect it to behave as other positions have behaved ON AVERAGE. If you constantly expect for something other than average to happen, you'll be disappointed over the long term.
ReplyDeleteJobs recovery is more likely if the dollar can stay down, anyone who says otherwise is trying to pull the wool over your head...
ReplyDeleteSome pretty serious profit taking right now. Not so bad on my stuff though.
ReplyDeleteMark - any opinions on ES, BRCD or BPZ???
ReplyDeleteAt 11:59 I remembered that I still have a whole 1000 shares of TWM that didn't hit my stop yet (I purchased them at the average price of $16.03), so I rushed to place the sell limit at the ask (which was $16.10 at that point) and got a partial fill for 700 shares. I am now placing a sell limit at $16.10 for the remaining 300 shares for the extended hours session today (for some reason, in OptionsHouse it lasts only for the next hour). I'll let the fate decide whether my limit gets hit today and I pocket $70 on this trade or I keep the small remaining TWM position for tomorrow.
ReplyDeleteDavid - I'm definitely a rule bender. ;)
ReplyDeleteI seriously don't understand how people can rationalize buying NFLX at these prices.
ReplyDeletecha-ching!
ReplyDeleteTOF right again - Ebay
:)
Vad had some interesting comments on VXX...
ReplyDelete[10:37] {davd} i paid with vxx, yet again
[10:38] {dino} me too davd, off my screen
[10:38] {Threei} I abandoned it completely
[10:38] {Threei} never saw worse tracking ETF
[10:39] {Threei} it may track the patterns of manufacturing ivory buttons for blouses in South Argentina for all I know, but not VIX
vb - congrats on the ebay trade! i recommended this to a few friends, one of which put all of his savings in it and he's really excited. if i wasn't so preoccupied with, amongst other things, BYD, which has a defined event (matching the bid on MGM's share of the Borgata or partnering/getting bought out to buy their share) on or before 11/12/2010, then i would be loaded up with eBay. it's a great company and paypal is a long term growth story.
ReplyDeletetof,
ReplyDeleteYes, the front page of yahoo says earnings up due of paypal. by the way, I owned a global payment gateway at one time (well sort of) -- it was very very easy money - one would think GS would have set up their Own version of Paypal
EBAY - Oh, that's fantastic!!! Congrats on that one vb, and anyone else involved!!! ;)
ReplyDeleteThose are the kind of stories that make great memories.
ReplyDeletecp .. thanks, but that was many many moons ago. (Maybe someday when i am a walmart greeter, I can sell the server with the sourc code on ebay. lol)
ReplyDeleteps what did you ever do with gmo? are you feeling happy tonight??
Your not really taking HER home are you 2nd?
ReplyDeleteSeems like the bears are kinda pissed-off tonight.
ReplyDeleteGMO - I expect it's going to be a very long story some day, here's to looking forward into the past!
ReplyDeleteSomebody finally had it right today when they pointed out that an appreciating Yuan would help China combat their inflation problems.
ReplyDeleteWhen you're in a complete vacuum, the only way to move forward is to throw something overboard.
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ReplyDelete