Win's Way: PM Trades

Lessons

1. If VIX is under 26, buy the dip. If VIX is over 26, sell the rip.

2. Always trade in the direction of the larger trend. Find the strongest trend in your time period.

3. Nothing as bearish as a failed breakout. Nothing as bullish as a failed break down.

4. Don't worry about the last dollar. Take your money and go to the beach!

5. No more than four positions at a time. Preferably 2-4. Scope out others. Pick the strongest.

6. Buy the strongest; sell (short) the weakest.

7. Nothing is guaranteed. Nothing.

Thursday, December 17, 2009

PM Trades

Bought GLD June 111 calls at $111.5 or so; sold Dec 111 calls. GLD now $108.08.

I'm pretty sure YG will come to $1050 - 1060 or so. GLD to $104 or so.

Before that YG should rise to 1120 or so. GLD to 109.5 or so. Sell Jan 111s at Gold $109.5 or so.

Buy them back at GLD $105 or so.

Bought SLV April 16 calls at SLV $17.08. SLV now at $16.9 or so. SLV much stronger than GLD. Did not make new lows. Still hugging supporting trend line. Will probably go back up to $17.20 or so. Sell April or Jan 16s at that point.

Buy back April or Jan 16s at SLV $16.5?

However, SLV will likely go between $16 and $16.50, and maybe to $15.75. That would be a high probability trade.

Dollar is going to 80 minimum, after a pullback, perhaps. This will affect the PM trade. I see PMs as rangebound for 1-2 months.

1. SLV trade: Went in with 100% capital too soon. Only trade with 1/2 of capital. Only go all in when 110% sure.

2. SLV trade: Did not wait for trend line support to go long. WAIT. If it doesn't get there, don't take the trade. Don't take a low probability trade.

3. GLD trade: EVEN WHEN BUYING LT, wait to be sure about support and resistance. Buy when you feel and think it's a bottom, if you're sure about the next support/resistance level. Even with 7 month options, you're losing, because of not waiting for a bottom. What's the point? Only take the best trades.

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Quotes to Live By

Write down the premise for the trade. Plain language. Nothing an 11 year old couldn't understand. TA should provide guidelines and tests for your premise... so simpy "MCP is going up" is not going to cut it... "MCP will find support along 30-31 and turn back up from there towards its 200 day" works. Now you have a written statement of validity for putting on your trade. No chance for equivication when buying or to say "well, it's broken 30 but maybe it will come back". If the premise becomes invalid, you must close your trade, even if you still think "It's going up".

- Jonny O on bluechipbulldog.blogspot.com

"Your time is limited, so don’t waste it living someone else’s life." -Steve Jobs

Those who expect to reap the blessings of freedom, must, like men, undergo the fatigue of supporting it.
~Thomas Paine

"There is a 100% chance you will be wrong at some point, and if you are 1000% invested each time, your expected future value is zero."

-- Will Rahal (The Man)

"It's my nature to 'overthink' winners and cut them loose too early, so trailing profit stops almost always kicks me out with far better profits than I otherwise would have taken. Our perception of 'what should be' in the market very often differs from 'what is so' and the difference is always money."
-- dowoper8r

We tend to understand success as a certain monetary or career achievement. Just as lasting, fulfilling satisfaction (happiness) can ultimately only come through service to others, so is success an internal state of being within immediate reach. I define it as honoring yourself and others.

So why not now already come into possession of the joy and confidence you believe will come through achievement? Then, your life will become not about striving for “success,” but expressing the success you already have."

-George Rahal

More rules/Things I have learned

1. Always meditate.

2. Use the daily charts first, then all others.

3. Always have a Plan B.

4. ALWAYS STOP OUT WITH A LOSS. -10% IS BETTER THAN -90%.

5. Time is your biggest resource. Take profits. Take losses. Get outside!

6. With futures, a bird in hand is almost always better than two in the bush. With options, wait for your target.

7. If you're anxious, you're early. If you're afraid, you probably shouldn't be in.

8. When trading equities, always sell the morning excitement! When trading anything, always sell the excitement spike!

9. Always follow your fundamental knowledge, then your charts.

10. 1 hour on; 15 minutes off.

11. When trading futures, never double down. Firm stops.

12. In Gold, watch the London trend -- 5 a.m. to 6:30 a.m. EST.

Win's Way

Lessons

Thursday, December 17, 2009

PM Trades

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