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, January 26, 2012

Lessons Learned

ST Top will come today around ES 1328, TF 800.

Lessons:

1. I learned again that the way to go short is via TZA and/or future month puts. 90% of my short is via TZA, bought at an average of TF 784. I have zero worries about that.

10% of my short is via Feb puts, average TF 776. I am probably going to lose money on that, even though TF will be at 760 by Feb 8. And I am scared about that. Oh well. LIve and learn.

You can ignore good practices -- meditating, exercise, buying future month options -- for a short while and make money, but eventually you will lose.

2. It is not possible to make money off every move. Sometimes, you just need to chill out. Yes, you could have made money if you were in the market. But you may have lost money as well.

My biggest problem is that I make a few trades that lose big. If I didn't make these, my results would be 100-200% annualized, rather than 50% percent annualized.

No comments: