Win's Way: November 2010

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, November 19, 2010

Long ZSL at $13.65; Still long UNG from $5.55; target $7

Wednesday, November 17, 2010

Sold AGQ at 113.5

One day profits of 5% too good to resist.

Plus, I'm learning that you have to be in and out when knife catching.

Plus, ES is at temporary resistance.

Plus, I want to get out and enjoy the day.

Tuesday, November 16, 2010

Trade Update

Sold ZSL at $15.4

Bought AGQ at $108.1

Bought UNG at $5.56

Bought FAS at $23.11

Update - Sold FAS at $22.4. Not happy with price action.

Saturday, November 13, 2010

State of the Market Review

Inverse H&S in SPX not yet complete. Target is 1250.

AAPL looking bearish LT, bullish ST.

Banking stocks look bullish. Breakouts being tested now. FAS?

/DX is a temporary resistance, but I have a target of at least 80 within a month. Perhaps a drop to 77.2 before further rise?

PMs look like more consolidation/ fall necessary (esp in Silver).

So, correction takes another 2 weeks? Then rise to 1250. Should get a tradable bounce on Monday/Tuesday from 1185 to 1190 on the ES.

Then 1210 then 1168 on SPX.

Final wave up to 1240-1260 in March? Double top on the NAS which will lag.

Targets:

Wave 4 Path (# 1 - 3 below)

1. 11/13- 15 - SPX ST bottom around 1185-1190; DX ST top 78.7 to 79.2. ZSL 14.8 - 15.5. SLV 24.2.

2. 11/16 - 11/18 top at 1210. DX bottom at 77 - 77.4.

3. 11/25-30 or so - SPX bottoms 1170 or so. DX 80.3. ZSL 18. (SLV 22.5).

4. Wave 5. SPX rises to 1250 +.

Friday, November 5, 2010

Next Phase of Bull Market

After a decline from 1225 on the ES to 1185-1190, I believe the SPX will rise to 1300 or so.

I am waiting for the decline to go long:

Silver __

and

Emerging markets

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