That is the essence of successful trading. You trade the setups or odds/probabilities. You never know if any single trade is going to be big win or not. You can try to minimize the loss. You place your bets according to the odds and expected payoff, the expected R. Grind it out day after day, you never know when the few big trades would come and lift the whole portfolio. Meanwhile you eat losses here and there.
That is why the 'all in” or “all or nothing” approach is not what a successful trading career is built on. But it is human nature to fall for the lottery effect. Constantly looking for that one break that would reach stardom.
That said, you got a factual observation there, and you made good points. Appreciate this kind of well thought out posts.
Everything was ripe. It just needed a catalyst to spook the market. If the conditions were all bullish, the GS thing would be shrugged off as ho-hum political gimmick that would go no where, as per Cramer.
Here is a guide to how to interpret news.
When Bullish: “……..
Weak data – Fed eases, stocks rally.
Strong data – Strong economy, stocks rally.
Consensus data – Lower volatility, stocks rally.
Bank loses $8bn – Bad news all out of the way,stocks rally.
Oil price up -Good for energy producers, stocks rally.
Oil price down – Good for consumers, stocks rally.
$US down – Good for exporters, stocks rally.
$US up – Lower inflation, stocks rally.
Inflation up – Good for commodities, stocks rally.
The market fall yesterday seemed to be related to an unexpected news event: the SEC suing GS. I have no way to know these things myself, but I heard that a lot, and didn't hear anyone refuting it.
An unexpected news event. I didn't hear of anyone predicting that news event. So, people short before the event were short for other reasons.
And, people who offered that the market might go down, made that offer for other reasons.
After the unexpected news event, I expected people to come out with stories about buying a bunch of puts and getting lucky. Or predicting that the market might fall and son-of-a-gun it actually did! WooHoo!
Nope. I heard stories of good trading yielding profits. Or people claiming they correctly called it.
I don't think you misread the situation at all when you didn't go short. I didn't see it coming. I myself was short, but not because of any thing I did right.
TNA had a weekly HOLD signal last week, rose this week, and remains a Hold. The candlestick this week is a White Candlestick. AmericanBulls has this trade starting at $44.23 on March 3rd, and this week closed at 63.54, up 43%.
TZA had a weekly WAIT signal last week, fell this week, and remains a Wait. The candlestick this week is a Black Spinning Top. AmericanBulls last placed a SELL on TZA at $9.83 on February 19th and this week closed at $6.06, down 38%.
Summary of Positive $RUT based ETFs & a few popular ETFs & stocks (Market positive): +8 Hold: QQQQ(up 15.2%), IWM(1x, up 12.9%), UWM(2x, up 27.6%), TNA(3x, up 43.6%), IYR(1x RE, up 15%), AAPL(up 26.4%), USO (oil, up 3.9%) New Confirmed BUY: AMZN
Transition to Market Positive: -1 Not Very High Reliability BUY-IF: URE(2x RE)
Transition to Market Negative: +3 Low reliability SELL-IF: SPY, ERX(3x energy) Not Very High Reliability SELL-IF(3rd week): DIA
Comment: Less Bullish this week, Somewhat Bullish overall, Neutral Oil, Somewhat Bullish Energy, Bullish $RUT, Neutral Real Estate Action for next week for TNA or TZA: None
That is the essence of successful trading. You trade the setups or odds/probabilities. You never know if any single trade is going to be big win or not. You can try to minimize the loss. You place your bets according to the odds and expected payoff, the expected R. Grind it out day after day, you never know when the few big trades would come and lift the whole portfolio. Meanwhile you eat losses here and there.
That is why the 'all in” or “all or nothing” approach is not what a successful trading career is built on. But it is human nature to fall for the lottery effect. Constantly looking for that one break that would reach stardom.
Everything was ripe. It just needed a catalyst to spook the market. If the conditions were all bullish, the GS thing would be shrugged off as ho-hum political gimmick that would go no where, as per Cramer.
Here is a guide to how to interpret news.
When Bullish: “……..
Weak data – Fed eases, stocks rally.
Strong data – Strong economy, stocks rally.
Consensus data – Lower volatility, stocks rally.
Bank loses $8bn – Bad news all out of the way,stocks rally.
Oil price up -Good for energy producers, stocks rally.
Oil price down – Good for consumers, stocks rally.
$US down – Good for exporters, stocks rally.
$US up – Lower inflation, stocks rally.
Inflation up – Good for commodities, stocks rally.
The market fall yesterday seemed to be related to an unexpected news event: the SEC suing GS. I have no way to know these things myself, but I heard that a lot, and didn't hear anyone refuting it.
An unexpected news event. I didn't hear of anyone predicting that news event. So, people short before the event were short for other reasons.
And, people who offered that the market might go down, made that offer for other reasons.
After the unexpected news event, I expected people to come out with stories about buying a bunch of puts and getting lucky. Or predicting that the market might fall and son-of-a-gun it actually did! WooHoo!
Nope. I heard stories of good trading yielding profits. Or people claiming they correctly called it.
I don't think you misread the situation at all when you didn't go short. I didn't see it coming. I myself was short, but not because of any thing I did right.
Earl,
That is the essence of successful trading. You trade the setups or odds/probabilities. You never know if any single trade is going to be big win or not. You can try to minimize the loss. You place your bets according to the odds and expected payoff, the expected R. Grind it out day after day, you never know when the few big trades would come and lift the whole portfolio. Meanwhile you eat losses here and there.
That is why the 'all in” or “all or nothing” approach is not what a successful trading career is built on. But it is human nature to fall for the lottery effect. Constantly looking for that one break that would reach stardom.
That said, you got a factual observation there, and you made good points. Appreciate this kind of well thought out posts.
Everything was ripe. It just needed a catalyst to spook the market. If the conditions were all bullish, the GS thing would be shrugged off as ho-hum political gimmick that would go no where, as per Cramer.
Here is a guide to how to interpret news.
When Bullish:
“……..
Weak data – Fed eases, stocks rally.
Strong data – Strong economy, stocks rally.
Consensus data – Lower volatility, stocks rally.
Bank loses $8bn – Bad news all out of the way,stocks rally.
Oil price up -Good for energy producers, stocks rally.
Oil price down – Good for consumers, stocks rally.
$US down – Good for exporters, stocks rally.
$US up – Lower inflation, stocks rally.
Inflation up – Good for commodities, stocks rally.
Inflation down -Fed eases, stocks rally.
Climate change -Soft commodities up, stocks rally.
World ends – Good for disaster recovery companies, stocks rally. ……..”
When bearish :
“…
Weak data – Poor earnings outlook, stocks fall.
Strong data – Fed will tighten, stocks fall.
Consensus data – Already priced in, stocks fall.
Bank loses $US8bn – More bad news on the way, stocks fall.
Oil price up – Bad for consumers, stocks fall.
Oil price down – Bad for producers, stocks fall.
$US down – Bad for consumers, stocks fall.
$US up – Bad for exporters, stocks fall.
Inflation up – Fed will tighten, stocks fall.
Inflation down – Weak economy, stocks fall.
Climate change – Higher inflation, fed will tighten, stocks fall.
World ends – Bad for insurers, stocks fall. …. “
http://www.wilmott.com/blogs/satyajitdas/index….
Red,
The market fall yesterday seemed to be related to an unexpected news event: the SEC suing GS. I have no way to know these things myself, but I heard that a lot, and didn't hear anyone refuting it.
An unexpected news event. I didn't hear of anyone predicting that news event. So, people short before the event were short for other reasons.
And, people who offered that the market might go down, made that offer for other reasons.
After the unexpected news event, I expected people to come out with stories about buying a bunch of puts and getting lucky. Or predicting that the market might fall and son-of-a-gun it actually did! WooHoo!
Nope. I heard stories of good trading yielding profits. Or people claiming they correctly called it.
I don't think you misread the situation at all when you didn't go short. I didn't see it coming. I myself was short, but not because of any thing I did right.
Got a feeling we are going to about 116 then a resume up trend to 125. Then June a swing down to fill the gap at 112
The Weekly view from Americanbulls
TNA had a weekly HOLD signal last week, rose this week, and remains a Hold. The candlestick this week is a White Candlestick.
AmericanBulls has this trade starting at $44.23 on March 3rd, and this week closed at 63.54, up 43%.
TZA had a weekly WAIT signal last week, fell this week, and remains a Wait. The candlestick this week is a Black Spinning Top.
AmericanBulls last placed a SELL on TZA at $9.83 on February 19th and this week closed at $6.06, down 38%.
Summary of Positive $RUT based ETFs & a few popular ETFs & stocks (Market positive): +8
Hold: QQQQ(up 15.2%), IWM(1x, up 12.9%), UWM(2x, up 27.6%), TNA(3x, up 43.6%), IYR(1x RE, up 15%), AAPL(up 26.4%), USO (oil, up 3.9%)
New Confirmed BUY: AMZN
Transition to Market Positive: -1
Not Very High Reliability BUY-IF: URE(2x RE)
Transition to Market Negative: +3
Low reliability SELL-IF: SPY, ERX(3x energy)
Not Very High Reliability SELL-IF(3rd week): DIA
Market Negative: -4
WAIT: GS, DRN(3x RE),
New Confirmed SELL: GOOG, UCO (2x oil)
Comment: Less Bullish this week, Somewhat Bullish overall, Neutral Oil, Somewhat Bullish Energy, Bullish $RUT, Neutral Real Estate
Action for next week for TNA or TZA: None
http://news.yahoo.com/s/ap/20100417/ap_on_bi_ge…
Now that is funny… and ever so true!
Earl,
That is the essence of successful trading. You trade the setups or odds/probabilities. You never know if any single trade is going to be big win or not. You can try to minimize the loss. You place your bets according to the odds and expected payoff, the expected R. Grind it out day after day, you never know when the few big trades would come and lift the whole portfolio. Meanwhile you eat losses here and there.
That is why the 'all in” or “all or nothing” approach is not what a successful trading career is built on. But it is human nature to fall for the lottery effect. Constantly looking for that one break that would reach stardom.
Everything was ripe. It just needed a catalyst to spook the market. If the conditions were all bullish, the GS thing would be shrugged off as ho-hum political gimmick that would go no where, as per Cramer.
Here is a guide to how to interpret news.
When Bullish:
“……..
Weak data – Fed eases, stocks rally.
Strong data – Strong economy, stocks rally.
Consensus data – Lower volatility, stocks rally.
Bank loses $8bn – Bad news all out of the way,stocks rally.
Oil price up -Good for energy producers, stocks rally.
Oil price down – Good for consumers, stocks rally.
$US down – Good for exporters, stocks rally.
$US up – Lower inflation, stocks rally.
Inflation up – Good for commodities, stocks rally.
Inflation down -Fed eases, stocks rally.
Climate change -Soft commodities up, stocks rally.
World ends – Good for disaster recovery companies, stocks rally. ……..”
When bearish :
“…
Weak data – Poor earnings outlook, stocks fall.
Strong data – Fed will tighten, stocks fall.
Consensus data – Already priced in, stocks fall.
Bank loses $US8bn – More bad news on the way, stocks fall.
Oil price up – Bad for consumers, stocks fall.
Oil price down – Bad for producers, stocks fall.
$US down – Bad for consumers, stocks fall.
$US up – Bad for exporters, stocks fall.
Inflation up – Fed will tighten, stocks fall.
Inflation down – Weak economy, stocks fall.
Climate change – Higher inflation, fed will tighten, stocks fall.
World ends – Bad for insurers, stocks fall. …. “
http://www.wilmott.com/blogs/satyajitdas/index….
Red,
The market fall yesterday seemed to be related to an unexpected news event: the SEC suing GS. I have no way to know these things myself, but I heard that a lot, and didn't hear anyone refuting it.
An unexpected news event. I didn't hear of anyone predicting that news event. So, people short before the event were short for other reasons.
And, people who offered that the market might go down, made that offer for other reasons.
After the unexpected news event, I expected people to come out with stories about buying a bunch of puts and getting lucky. Or predicting that the market might fall and son-of-a-gun it actually did! WooHoo!
Nope. I heard stories of good trading yielding profits. Or people claiming they correctly called it.
I don't think you misread the situation at all when you didn't go short. I didn't see it coming. I myself was short, but not because of any thing I did right.