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Politics : Welcome to Slider's Dugout -- Ignore unavailable to you. Want to Upgrade?

To: JimisJim who wrote (7643)	1/11/2008 8:59:26 AM
From: SliderOnTheBlack	Read Replies (1) \| Respond to of 50579

When you say move the stops up tight, what do you mean? 5%, 7%, 3% 0%?-- what's tight? HUI 434 -- "The Money Line" = where to set your stops. Now that doesn't mean you cash out your entire portfolio on the first tick below 430... what it means, is that this becomes the "money line" whereby you structure your portfolio and your trades, to where you refuse to give back your gains. No one in the real world jumps "all in" and "all out" at any one price points... you fade in and you fade out. Options are the tool made for this. You can use calls, along with both put buys and put sales to hedge/insure your positions.... to discount, or even fund your re-entries on pullbacks, or to bank premium income while you sit patiently for exit/entry levels to be reached. You can take the premium from your put sales...to fund your call buys etc. The 434 level was interim resistance, and a pullback level earlier in this move...and then became support and the "launching pad" for this leg. And yes, I know that's tight... real tight. And the reason it's so tight - is because the more accurately we've caught a move, the tighter the stops we set. My goal into "parabolic" moves... (and the HUI chart is getting vertical) is to have less and less "net" exposure, by taking profits in common shares -- while letting my call options run... which gives me exponential leverage to the remaining move. If I'm trading -- "out in front of the market" (and we certainly have been) ... this is what works for me. Virtually all interim cycle, and ultimate end cycle corrections in gold and most commodity sectors are unseen by most TA, are very fast and very deep. Hence, the goal is never to be "all in" into the top, because thats always a fools game. The goal is to be "all in" at the bottoms... but, "less in" and "levered" via options into the tops. That's just my thinking... There is "no perfect formula". And traders should quit looking for one, because none exists. Especially in TA. What works for me and is right for me -- may not work, or be right for you. I've had a great run... out at the top in May 2006 to much abuse from the yellow faithfull... called the next 15+ months for what it was... a silver platter trading range... and bagged that. Got back in large into the August forced selling/capitulation bottom....took profits into the first HUI 420-450 top, got a windfall via puts back to the HUI 370 support level that we expected... and now this "V" rally to new highs. And we've done it by continually being "out front" of the market... anticipating it...and not reacting to it. If someone took a major hit on the May 2006 correction, then got bounced and battered by the 15 month trading range...and is playing "catch up" here... then what works for me - may not work for them. There is no "one size fits all" trading methodology. And what's hard to communicate is that trading is 80% mindset and only 20% knowledge and ability. In baseball... when's the best time you want to get up to the plate and take your swings? -- when you're in the zone... having gone 21 for 35 in your your last 7 games... or, when you're in a "2 for 35" slump? You're the same hitter. Same bat speed. Same knowledge of the pitchers. Same overall physical and mental ability. But what's the difference in ability and results when you're on a "21 for 35" tear and in "the zone", versus being in a "2 for 35 slump"? ... MINDSET All traders are human. And all humans are emotional animals. Controlling your emotion and keeping the proper mindset... balancing fear and greed, the desire for gain vs. the fear of loss... that's THE key. You must find a trading strategy and approach that works for you. I've found mine... but, that doesn't mean it's the perfect fit for you. ...hope that helps. S.O.T.B.