Now I think I'm wrong all my trading life. I use charts, but mainly use fundamental analysis, and what's worst of all, I use my reason and the reading I found to support my idea. This is totally wrong. I was lucky before that I have some winners and I thought that's due to my analysis.
- Now I need to change to mainly use momentum with trends only. Some of my plays like URZ, it's due to momemtum more than fundamentals.
- Yes, I may turn to bullish at the last moment as the market turns, but I got to try this new method.
- Once it turns, then I'll follow the new trend, which is bearish.
- And if it moves sideways, then I will use tight loss limit to cut loss.
- I'll still use FA, like the uranium story is still great, but I'll use TA as the main method to trade, and focus on momentum.
- This change is due to very painful experience I had recently, I'm on the wrong side. And the lessons I learned from year 2000.
- Today I continued to sell my short ETFs and puts. As a result, I don't have any short ETFs left. I sold about 1/4th of my puts. Still like the idea to do it slowly since the market is very top.
- But Dow and S&P500 can work out their overbought condition by just pull back a little like today and yesterday for a while. So it's not exactly what shorts are in mind.
- So I'll continue to raise cash to add long positions.
- Today I added URZ, ONXX, LVS calls. All are speculative plays.
- I know change is not easy, but I got to do this, and make sure I make it work with my style.
- Buy when it's moving up, sell when it's moving down. This is what the momentum is.
3 comments:
I also sold DXD today, to stick with gold as I mentioned yesterday. I'm uncomfortable, though, because I've been waiting for two down days in a row, regardless of how limited, with the thought that that would signal a top. So I probably sold at the exact wrong moment.
I have to say your switch to following the trend seems to me a bit ill-advised in that I think when the market finally tanks the action will be fast and furious. We'll both be on the outside looking in. Oh well.
When this happens gold will most likely be dragged down as well; long-term, though, it's a safer way to bet against the market than going short.
Michael, trading is a lifetime experience, even if my switch is not well timed, I'll try and do my best to learn this momentum thing in stock. And I still have enough puts if market turns to protect me.
Long term, I love gold and gold stocks, but now the charts for gold say it's not ready, so I'll keep watching for gold.
When the market finally tanks, I think gold will be one of the best assets to be in.
I have a habit of repeating dumb mistakes in the market, so you're probably right in your flexibility. The thing for me is that I often find myself saying, "If I had just held on... another day, another month." On the other hand, I haven't had a down year in quite while; now, holding on so long (and being overly concentrated) puts me in a mess it's going to be tough to straighten out.
I really like your site, by the way--refreshing compared to all the chest-pounding elsewhere.
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