More than one year

I changed.

1. Recent gains are due to playing swing trades correctly, most of them are from the long side.
2. Recent losses are due to option buys, most of them are from the short side(bought puts).
3. I won't buy options in the future, unless it's an extreme market.
4. I will write options, this way I keep a distance from the assigned value, and even assigned, may turn out to be a winner. The key is following:
5. It has to be OTM puts, I can't choose ATM puts, the buffer is too small, specially use 3x ETFs.
6. It has to be sized correctly, that is, 1x, 2x, 3x, 4x, turn aggressive at the end of the move, not the beginning, most of the cases, sitting on the sideline.
7. The key is not to lose money, not to be in the market all the time.
8. I invested huge amount of time in trading, and learned a lot, but now is time to do the most smart move: play small, play smart, and be a risk taker.
9. Like play poker, I know I can win certain games, but if I play big tourney every weekend, I'll lost in a few weeks, since the odds is just to small.
10. Same as in the market, I need to play only when I sense it's an overbought or oversold market, and it's near the end of a move.
11. Sometimes, take quick profit is a great idea, even I miss the rest of the move; but sometimes, it could be a huge winner, like I bought early August(around 12th) when marekt tanked, I could sell at middle of August, when marekt rallied for 3 days, I didn't. All these TNA,TYH and MWJ, went from quick 4-5% gain to 5-10% loss. Yes, I sold today for a gain, but I could have 20% gain than this 5% gain. So, don't be greedy, and when I was right for a quick profit, take it.

Win

1. First, you need to play by the rule, improve yourself to be the best. You need to study day in and day out to find useful patterns, useful setups, cut loss quickly and take profit at the optimal time. This will build a base.
2. To make real money, you have to take a calculated risk(sometimes, it's surprisingly small risk) to get great reward, that is, you play in a field, there is no rule, it's such a new field, you can almost just go there and pick whatever you want. But you have to be the first one, or second one to be there before everyone else, once there are too many people there, there will have rules and the profit will diminished quickly.
3. Similarly, finding an edge in market, it has to be less crowded play, be the very first to be there, it's better to let smart people identify the opportunity, and you go in and follow them, get out before it's too crowded, and move to the opposite side. It's when to get on the train and when to get out make the whole difference.
4. If you can break the rule while others follow the rules, you'll have great advantage, but usually the reason there is a rule, rule breaker will be punished for breaking the rule, unless it's a new field.

Weighted market moves

1. I will add positions to the opposite of the end of a trend.
2. I will add more weight to that positions, ideally, double the previously small positions.
3. Do this three days in a row, then use 2x ETFs, 3xETFs, options(put on the opposite).
4. By doing this, it will win 100% if I have unlimited resource, and double the size each time.
5. For me, I have to take an educated guess, and take profit if I have one and let the losers recovery.
6. The puts on opposite 3x ETFs is a great way to profit, and low risk I may add, since the one correct action may recover 3 times of the costs.
7. The key is starting small, even using OTM strategy, like right now for me, I am way under the water, and limit my action to add more.
8. With these trend lines, oscillators, I think can perfect this system and make great comback in the future.

Actions

Don't let macro view block my trade.
Don't be a bear, don't be a bull. Be the winning trader.
Reduce risk level so I can sleep at night.

1. Sold 140 SRS at 33.5. Bought last Thursday at 32.17.
2. Sold 90 FXP at 20.5, and 130 at 20.5, bought them last Wed at 22.7.
3. Sold IWM May 47 puts at 3.2 and 3.1, bought last Thursday at 2.86 and 2.79 respectively.
4. Market closed almost flat, SRS at 31.3 and FXP at 20.2 and even IWM went up, the puts closed at 2.8.
5. I will trade less and be more correct than before.
6. Now I still have SRS and the naked SRS puts that's underwater, and AZO shorts are underwater too. It's time to try to get these out close to even as possible.
7. Not losing is the first priority, then making some money back.
8. There is no love and no hate in the market. It's a ruthless world, when you buy, the sellers are dumping to you so she can make money;when you sell, she is buying the cheap shares to make more money. Trust none!
9. I lost my trust in the market, in the Fed, in the company, and in the government. There are too many false actions by them to get you.
10. I will take care of myself in the future.

Trading rules

Respect the price action but never defer to it.Our eyes are valuable tools when trading but if we deferred to the flickering ticks, stocks would be "better" up and "worse" down and that's a losing proposition.Discipline trumps conviction.No matter how strongly you feel on a given position, you must defer to the principles of discipline when trading. Always attempt to define your risk and never believe that you're smarter than the market.Opportunities are made up easier than losses.It's not necessary to play every day; it's only necessary to have a high winning percentage on the trades you choose to make. Sometimes the ability not to trade is as important as trading ability.Emotion is the enemy when trading.Emotional decisions have a way of coming back to haunt you. If you're personally attached to a position, your decision making process will be flawed. Take a deep breath before risking your hard earned coin.Zig when others Zag.Sell hope, buy despair and take the other side of emotional disconnects (in the context of controlled risk). If you can't find the sheep in the herd, chances are that you're it.Adapt your style to the market.Different investment approaches are warranted at different junctures and applying the right methodology is half the battle. Identify your time horizon and employ a risk profile that allows the market to work for you.Maximize your reward relative to your risk.If you're patient and pick your spots, edges will emerge that provide an advantageous risk/reward profile. Proactive patience is a virtue.Perception is reality in the marketplace.Identifying the prevalent psychology is a necessary process when trading. It's not "what is," it's what's perceived to be that dictates supply and demand.When unsure, trade "in between."Your risk profile should always be an extension of your thought process. If you're unsure, trade smaller until your identify your comfort zone.Don't let your bad trades turn into investments.

From KingShort

ok I just wanted to post a note on something.

imagine 10 guys in a closed room who are to trade some security X.

X is trading at $10. with 100 issues on the room. assume no risk of default). all 10 have the same amount of cash (I'll come back to this later)the 10 guys are all humans. they all think the same (trust me on that). the room is bullish and everyone believes X will go to $20 soon. so based on their belief, cash-flow calculations, TA, EW, fundamental analysis etc. or whatever you like to call it, they all want to buy. even if 1 of the 10 is a monkey if the other 9 are buying he will buy too.

so lets say each has now acquired 10 stocks of X. market price of X is trading at $10. everyone is LONG.couple of days later X moves up to $15. what do you expect to happen? one might want to take profit already. but all expect $20 so why sell? at the same time another wants to buy 10 more @ 15 because he knows this is going to $20 - but hey - who is going to buy it from him at $20? maybe there is an idiot big enough left to think it can go higher or I can convince one of the other guys? you think $20 will ever be even reached!? how would you play it?

I'm not going to complete the thinking in this scenario, don't have time but although simple it's actually what happens in reality. the point I wanted to make was this: if all 10 traders are rational the price will be at a 'fair' price that all 10 agree upon. very few would want to disagree with 'the group'. this fair price will be fair, efficent, and accurate. there wouldn't be any speculation, trading - it would be frozen. so how is anyone to make money? so it fails.

to be able to make money it is REQUIRED that the market operate irrationally. if the market operates rational i.e. trade where everyone thinks it should trade - there would be no market, and no one will make money! this is why when you have 90% of the people who agree the market is under valued or over valued (probably rightly so) are wrong and lose money. earlier we assumed all 10 had the same amount of cash. now assume 1 has more cash than the rest. how can he use it to his benefit? in capital markets we call these "the biggest house in the jungle who SETs prices".

this market we're trading at the moment is a great example. round the corner it will take a magnificent turn just at the moment when most have gone insane, closed positions at a loss and jumped off the roofs. it has NOTHING to do with toxic assets buy-back, up-tick rule, g20 or whatever. the whole of credit crunch was the room full of 10 guys above on a grand scale. unfortunately the little guy sitting in his bedroom trading wanting to buy a ferrari totally forgets the significant players and political war-fare interest the market attracts. did you seriously think if you can turn numbers in a 'free market' from your kitchen then other larger parties (such as governments) have no interest in this? this is also another reason why it doesn't make sense to share your position with the public and if you have GREAT friends then you sure can make alot of money in the market.

when we were around 690 everywhere I looked the talk was about SPX @ 400 or 500? 550 or 560? or maybe bottom at 300? even war!?now when I take a look around the majority discussion is about SPX @ 950 or 960? maybe 1100 or 1200?If you've lost your life saving holding to your short from 700 then file for bankruptcy. but if you made a good entry from thursday and feel VERY UNCOMFORTABLE about it then you should know that you've made the right trade. it's a trade worth fighting for and believe in.

Have a good weekend..

Future plan

I exited almost all positions, will do my best in the future.

1. AZO, still have 2 shorts at 145.5. Now it's 158.2. Covered one at 157.8 today(this one shorted at 160.6).
2. POT, MOS, MEE, WFR plus covered calls, I will let the calls take care of them. If called away, I do great on these.

ET.

1. Will do only a few things there, short stocks like AZO.
2. Sell OTM puts on stocks like POT, MOS, with high premium.
3. Buy stocks like POT,MOS, DBA,GDX if market crashes. long term play only.

IB:

1. This will be my trading account.
2. Wait extreme conditions and bet on 2x or 3x on options. Need to wait 3 days before I take an action.
3. Paper trade, then paper trade, both need to be wrong before I take a 3rd shot. This way, I will likely catch the Sept low, Oct.low, Nov. low and now the March low.
   
4. Only on these very high possibility shot. Others are not worth it. Reduce my trade and focus on work.
5. Long term, it's the inflation trade, then another big crash.