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Strategies & Market Trends : MARGIN - Do's and Don'ts

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To: John F. who wrote (22)8/8/1999 7:41:00 AM
From: Dale Baker  Read Replies (1) of 35
 
I started this thread two years ago to try and stimulate a debate on this subject. No one ever seemed interested.

Since then I have stuck to a rule of never going more than 10% margin on the long side. Since I stay fully invested I will use more than that to go short; at worst my portfolio is fully hedged and won't move much either way.

Lately I have done some large shorts in QQQ and XLK when the market looked weak. It cushioned the blow of momentum longs pulling back. But I always kept my account equity over 50%.

Using a ton of margin long is simply gambling when the market is wallowing.
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