How Therapy Restored an Income Stream
The Dissociative Trader's Survival Guide
Support, Resistance and Filling the Gaps (heh heh - I like this one)
Previous Thinking that kept me out of the market - I can't. What if "something fucked up" happens to me in the middle of a trade?
The New Thinking - Now that I understand my own mind, I can pre-arrange things and trade in a way that won't harm the bottom line should I disappear down a rabbit hole with $$$ on the line.
The usual rules still apply - Don't go all in on anything, watch the charts, hedge and/ or average up and down and don't fall into the trap of becoming a deluded and greedy hold-out in any trade. Keep news and mob psychology in mind and use them to find possible catalysts for chart action.
There are new rules, too, to hedge against the rabbit holes - Never trade on margin, try not to be too premature. If you suspect you might be premature, or if you smell a possible rabbit hole in the near future, stick with the ETFs and the indices. If you can tell you are about to go down, then go directly to your accounts and enter your sell orders at the proper exits for Good Until Cancelled. And then as soon as you leave the rabbit hole, go directly to your account and assess the situation. Do not buy individual stocks unless they are in a position such that you would not mind moving them from the short term 'trade' column to the longer term 'investment' column. Be very careful to mind ALL the highs and lows and give them extra significance because for you, a day trade could become a swing trade, and a swing trade could become a longer holding. But you can still trade and make money. Oh, yeah. :-) Because you understand more than the markets. You can make money because you understand your own mind.
So, what's up at the moment?
Well... the S & P 500. It is nearing resistance. Will it break out? I don't know. I think that would be an awfully long bear market rally. Especially in the face of funny accounting amid continued bailouts.
And most especially when there are gaps waiting to be filled down below after the banks are finished reporting their questionable earnings and the market fakes an orgasm..
We shall see, eh? I have rules both new and old to assist me in the event that I am wrong.
And in any case, I can sell off my little Freddie Mac position that's up more than 150% from where I bought it earlier this year. My own personal rules... They pay me.
Good thoughts.
ReplyDeleteRe: Banks.
I saw similar behavior in the Volkswagen stock last year. Porsche secretly bought 75% of the company which triggered an incredible short squeeze. (Stock went from 200 to 1000 Euros a piece in like 3 seconds.)
A good short squeeze can feel like it's going on forever. It doesn't. Volkswagen eventually returned to 200, quite a round trip huh.
I would have loved to be in on the Volkswagen trade! Good one!
ReplyDeleteYeah, I'm squeezed a bit in one account with FAZ, but I hedged with FAS and took the profit. I'm going to hold the FAZ for a while over there. I don't like the time decay, but I know I'll at least break even and probably make a few bucks, too.
I'm also in my other account with FAZ. I started scaling in the FAZ over there and I'm at 10.44 hedged with the FRE (which I might sell in favor of cash and SRS).
I expect that we might bounce off the 880 in the SPX between now and when we hear from BAC on Monday. After that I think it'll be a pretty decent leg down. Did you hear about GGP (major CRE outfit) filing Chapter 11? Alot of ugly news today. Maybe we won't make it to 880? But then there is the OP EX... It's a regular soap opera in the marketplace.
Good trade with FRE and FAS!
ReplyDeleteI didn't have any VW stock at the time but I did have a great time trading calls and puts on them until my European broker realized that something is terribly wrong with the stock and disabled any further option trading on it.
Similar position with FAZ, badly hurt on the one account, not so bad on the other. Was only partly hedged due to temporary stupidity caused by drunkedness. Never again.
It's a regular soap opera in the marketplace.Sure is, that's one of the things I love about it. :)
Read the Maximum Pain for SPY options would be 80-82 or so, but the bulls? are really fighting it, aren't they...
And didn't a certain Wall Street broker actually put out a recommendation for GGP just this week? Scandalous. :)
I am glad you have fun trading.
ReplyDeleteMust say, chunks of this post went right over my head!
I'm glad I don't listen to the brokers, Amanda. They seem to be a quick way the poor house. If any of them really knew what was going to happen, they wouldn't broker anymore because they would be so rich they'd be off living it up somewhere. Sometimes the advice of certain brokers and analysts can almost play the role of a contrarian indicator, too. (And right now I'm thinking of a certain loud-mouthed clown who likes to act like a jackass on television.)
ReplyDeleteI am ready to see what will happen on Friday. The bulls are fighting it hard, but the news is beginning to leak and reality is about to set in. If I agree with anyone right now, it's probably Roubini. I think we're up next week.
Yes, I have been having some fun of it, Kahless. It's good to have an interest again. One that I can actually participate in.
:-)
The money isn't bad, either. I'm not rolling in dough by any means, but so far this year, the trading is amounting to the same income I could pull in working part-time. Since my problems still make it impossible to hold a job, I feel somewhat vindicated when I have successes in making my own way without having to try to force myself into doing something that would only bring a terrible disappointment when I can't sustain it.