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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: HairBall who wrote (40196)	2/13/2000 7:50:00 PM
From: donald sew	Respond to of 99985

LG, >>>> However, as one who has been following your Pro Fund strategy, I would like to know why you're hedging....is it not a possibility that your to focused on your old method..options? <<<< Thats a good observation. Firstly LEE and others have question me on that strategy also, and I main response was basicly my own psychology in trading which, of course as you noticed was part of my options method. Frankly, it may not be needed, but the question is whether it would help or hurt if I was to change. I will have one very major problem and that I will almost never chase, just something that in inbedded in me. So lets say I miss the first strong reversal day, I just wont get in at all and will miss that cycle even if the move in the index continues strongly. So by hedging, I am at least almost always in somehow. I also noticed that in less than 1 month we have already had 6 completed trades, and I doubt that I would have had as many if I did not hedge. What is interesting is that we have one small USPIX trade that is a bit under water, but if it wasnt for that trade I would not have had the recent successful trade in the UOPIX which netted 15%. So I guess it is style, as you notice, or call it psychology. Regardless, and I knock on wood, it is working. Keep in mind that for the time being we are taking a very conservative approach to risk, where we average only 25% of the capital per trade that is at risk(not hedged). Currently we do have it at about 35%. If I was to increase the positions to 50%, the risk would be increased and I would not be able to hedge as much. Hope that makes sense seeya