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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: advocatedevil who wrote (59395)	1/25/2002 11:22:39 AM
From: Jan Crawley	Respond to of 70976

I only trade with money that I can easily afford to lose Would not have it any other way.

To: advocatedevil who wrote (59395)	1/25/2002 11:43:32 AM
From: BWAC	Read Replies (2) \| Respond to of 70976

<I feel my true "safety net" is the fact that I only trade with money that I can easily afford to lose. > Of course. The only way. But for the sake of argument isn't this what you really mean? Step 1: Account #1 Long Term Hold. Rules: Buy a stock that has good value, good trading volatility, good volume, good long term fundamentals, using only money you can afford to invest. You should be reasonably confident this stock won't self destruct and is fairly valued. Hold this stock with no trades. Step 2: Set up Account #2 Trade stock selected in Step 1 mostly short. Design is to create cash flow from the daily movement and volatility. Perform this in a regular, constant routine, ensuring that you are almost always essentially in a hedged position to mitigate up or downside risk. Account #2's basic function is cash flow. Cash flow generated by the trades. Note: Step 1 and 2 are essentially performmed at the same moment in time Step 3: Roll cash flow into buying additional shares for Account #1. Which EITHER serves to allow more share hedging in Account #2 or serves to allow participation in Capital Gains of the selected stock. (Based on your discretion and gut feel at any particlualr moment or trend) Step 4: Keep with it. If you don't actively trade the hedge it doesn't work.

To: advocatedevil who wrote (59395)	1/25/2002 12:06:24 PM
From: mitch-c	Respond to of 70976

FWIW, I feel my true "safety net" is the fact that I only trade with money that I can easily afford to lose. If I pissed it all away, it still wouldn't impact my lifestyle or my family retirement portfolio to any measurable degree. And THAT is one of the clearest risk-assessment guidelines I've seen. People in different situations than yours adapt that concept to their own situations. I have said nearly the same thing about the (limited) option trades that I do. From that perspective, Enron was a daytrader who margined himself into oblivion. - Mitch