<A couple weeks ago,I concluded that the best way to play this market was to get invested a certain %. Then, calculate the lowest reasonable level to which the S&P Cash could drop. Using a Martingale strategy, divide my total remaining investable funds into "units". Build these units in a pyramid structure for placing them into the market as it
went lower to that lowest reasonable level, i.e., increasing the "bet" as the market dropped. Also, I determined at which level I would exit the market if it went up from here. As you can see from reading my plan of action, I essentially reached the same conclusion as you about the future market direction. It's a good strategy for me in that I can be removed from observing the market for long periods (days) and my wife can handle the orders. >
Interesting strategy- and it can work, if you have enough capital. My buddy told me a story (he's an old geezer, so he's full of em') about how the Arabs went into the casinos at Monte Carlo and beat the house for millions. I didn't think it was possible to beat the house consistently, but he said they did it.
Here's how: They would play a game that was fairly even odds like blackjack or roulette, and placed a small bet. If they won, they keep the winnings, and make the same small bet again. If they lost, they would double the bet. They would keep doubling the bet until they won (these guys had suitcases full of money). The odds of them hitting a losing streak long enough to deplete their resources were quite small, and they basically cleaned out the house.
Now if you or I tried to use that same strategy, odds are that we wouldn't be able to come up with enough capital to double the bet in a matter of a few days (I've done the math).
This strategy that you're planning on using looks very similar. It can work- but you can't have one of those really long losing streaks, or your capital will run dry.
Regards,
TW |
