Well, i promised myself that next time i had a losing day i'd type out (and perhaps expand on) some of the 'rules' that i've been jotting down in a handy notebook.. i lost today, so here goes:
-moderate position sizing , so that you can think straight..
transacting a $50k lot is Never necessary on entry , ease in .. bulk out
-recognize bearish tendencies during the heart of a bear run.. so you were right about the selloff : do not overweight after prolonged bear success .. snare it again, after a bounce
-chatting is okay but you needn't feel it necessary to be a constant source of content , 'shaddup and trade'
-never fade the first impulse .. so it's been grinding down but holding the lows , then bamm! the floor disappears .. Maybe it's a headfake, but more likely : its real. Want to fade something? wait for at least 3 pushes after the initial impulse. an outsized volume and bar expansion might be your clue to go contrary
-no counting chickens b4 they've hatched.. money that's still in a brokerage account is money that's still on the table.. rake well and rake often
-forget about earnings plays and after hours fodder : you're not a genius
-stop caring about round numbers.. so you're up $875 instead of $1000? or maybe you could net 85cents instead of a dollar.. who cares? if the time is right, book it! (and if you're counting your dollars, the time is probably right)
-stop the tendency to want to buy relative weakness (hey, stocks are up, this one not so much, i'll buy that) and sell relative strength (hey, stocks are down , why is this thing green? i should short it) .. flip your thinking : buy that strong stock on a pullback , and short the weak one after a bounce
-FAS/FAZ (3x beta extreme) shy away from it .. why? today all the leveraged short ETFs recovered eod (and now trade at their highs of the session) except FAZ , and so while you may have been right about the market's direction eod, if you had decided to use FAZ you would not have gotten paid to the extent that you might have otherwise.. for this reason you should instead gravitate towards non-sector specific levered 3x ETFs.. that leaves the BGU/BGZ (3x beta light) and TNA/TZA (3x beta medium) pairings
-never initiate a transaction after 3:50EST , no excuses.. and if its after 3:30EST it had better be good, i.e. backed by TA and not some highfalutin attempt to double the day's profits in a half hour's time .. yeah it's okay to exit at the last minute, but starting a trade w/ 10mins left in the session is like tapping a keg after 2:00AM , you just don't do it***
-discus progress very sparingly w/ friends , absolutely no dollar figures .. don't speak of success, lest it be jeopardized .. think about what epictetus said about the importance of humility .. hush your winners in the same manner in which you'ld sweep a loser under the carpet
***addendum: only profitable positions can be held into afterhours , if you're not already in the money.. forget about it, start over the next day : get rid of it b4 the bell
---adhere to these tenets and enjoy the freedom they can and will afford
(feel free to add and/or modify) |
