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.

Friday, May 7, 2010

Trade Update

Long AAPL July Call spread at AAPL 234; long EURUSD at 1.2650; long GBPUSD at 1.472.


1. Call Spread because of IV crash. I expect VIX to drop, which will affect my 230 call, but hopefully it will affect the 250 call more.

2. Long AAPL because of my premise that either

a) we get big bounce in the next few days, or
b) the bull market continues. I suspect b). I don't think we've seen all the greed come out yet.

One of the above has to happen, IMO.

If I am wrong, the 250 calls protect me on the downside.

But, obviously, I don't think I'm wrong.

AAPL is the only one I expect to hold (perhaps for more than 1 month). The currencies are for the next 1-3 days

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