Date posted Our likely investing actions Result
May 22, 2005 Looking for an entry on long gold or silver, and adding to open corn position.  
May 15, 2005 Our best guess is that the market will be up on Monday morning but is now overall biased sideways to significantly down for the rest of the year. We'll be looking to short the S&P 500...as of Thursday the 19th, we're standing aside and waiting for our projected chart peak shown here. Being long has too much surprise potential for our taste now. We expect a break down during the Friday through next Tuesday timeframe. No entry found 0
May 10, 2005 Looking for another buy of of the DOW or S&P 500 or NASDAQ - see here.
... at around 1155-61 on the S&P... filled at 1160, hit mental stop at 1155, reversed and went short
at 1154, out at 1149, then back in long at 1151 and out at 1155 on 5/13... wild day.
$225/contract
May 3, 2005 Possible buy of gold, silver or mining shares later this week... cancelled 4/5, pattern did not follow through.
We're back to a holding pattern and mostly (~70%) in cash.
$0
April 30, 2005 Fairly low risk short term (3-5 weeks) buy of the DOW or S&P 500 or NASDAQ - see here.
Risk is unwelcome surprise from Fed interest rate meeting upcoming on May 3rd.
Entered trade late on 4/3... exited early morning 4/10
+$150/contract

Note: most of the trades we do are in the futures markets. We feel that via the use of relatively low leverage that they provide the simplest (and least subject to manipulation) way to benefit from trends and signals, but in no way recommend futures to anyone due to their inherent high risk.

We're not generally big fans of stocks, but would suggest investigation via a good bookstore of the area of ETFs (like the SPY which tracks the S&P 500) or options (like the QQQQ which tracks the NASDAQ 100) as a less risky alternative to futures. Make sure to read our disclaimer below too. We're not investment advisors!



How we trade

Keeping in mind that any attempt to summarize our trading style and years of experience will always be incomplete, we've had requests to put something more specific here in addition to the data in the general hat. Many books have been written in this area and the best overall recommendation we've heard is not to blindly follow some advisor or friend or hot tip, but to make up your own mind on what and when to buy. It's the only effective way to become successful in our opinion.
  • Identify the trend in 'flation and the economy, select the investment area and the direction per the hat basics.
  • Consult our own forecasts to confirm the timing and direction.
  • Look at the price charts of the investment and estimate support and resistance, with all the data we have.
  • Determine if the trade has at least a 3:1 but preferably a 5:1 ratio of possible profit to possible loss. If it doesn't, don't do it... period.
  • Establish guidelines for the trade in writing, including why we're trading and the level of a mental stop loss, etc.
  • We write down everything we think might help in case things go wrong, since that is where we learned what mistakes not to make and what actually does work for us.
  • With technical analysis tools like the ones noted here, start looking for a low point for a buy or a high point for a sell.
  • For futures, we use real time charts of 1-15 minute duration and for longer term trades use daily, weekly and monthly charts.
  • NEVER buy when RSI are above 35-40 or MACD is above zero, and ensure a trend line has been broken. Use all the tools in order to move the odds to our favor.
  • Once in the trade, watch it for trend violations and violations of the underlying reasoning of why we opened the position.
  • Trading can be quite emotional and having the original reasons and logic in writing allows us to review it when something unexpected happens and to judge whether we should exit... in an unemotional way.
  • If the trend is violated significantly or if the mental stop is hit - get out, regardless.
  • Otherwise, hold on until the target price is hit or close to it. Continue using the technical analysis tools and take the profit when the trend changes.
  • We also frequently use a rule of thirds. Once the trade is definitely profitable, we'll take profit on 1/3 of the position on the first trend break and take a second third when we think the trend has actually peaked. When the trend has been confirmed to have broken, we'll take profits on the final third.
  • Continue to study the fields of technical analysis and market sentiment. Tools start and stop working and fall in and out of favor, and new ones are invented.
  • To quote market observer Ray DeVoe: "Good judgment comes from experience, but experience comes from bad judgment."
  • Yes, it can be quite a lot of work!


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