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Pailin's Trading Corner

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Wed, Oct 19, 2016 - 8:21pm (Reply to #41365)
pailin
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re: risk

argentus maximus wrote:

In Rotella's case I used to be intimidated by a perceived need to diversify every which way into countless uncorrelated assets. Then I saw his charts about how much risk reduction is achieved by how few assets. (p. 467 in my book) Just 5 to 8 is enough for some powerful diversification. That was enabling to put it mildly and removed a lot of portfolio size envy!

Managing portfolio (aka concentration) risk is no different than managing any kind of risk: you try to mitigate it's detrimental effect without muting (much) the reward aspect. You do not try to eliminate it. There is no perfection. The allure of concentration is when you win...you WIN BIG. Figure this balance out (for yourself, your own acceptable risk tolerance) and you'll soar with the eagles! I do it daily in the art world with really only a handful of 'positions': cash (liquidity), contemporary/fast flips (similar to tech/biotech stocks), vintage/slow'n'steady (blue chips) and then just manage the ratios according to where I am today, where I see myself tomorrow, and how much cash I need to pay bills or go deep on a big deal I smell in the wind...

To the intelligent man or woman, life appears infinitely mysterious, but the stupid have an answer for everything. -Edward Abbey
Thu, Oct 20, 2016 - 3:36pm
tonym9
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2 attempts at trying to catch

2 attempts at trying to catch the v down of c of II via DUST....did iv complete? Not sure. The more I try to learn this stuff, the more questions I have. For right now I'm relying on experts for charts and I'm only using it as a data point, not all in like most EW'rs do via ignoring other datapoints.

I can't ignore tried and true data inputs like the usd/jpy, correlations, etc....they saved me from getting caught in DUST when it went back down this afternoon and it showed a good entry this morning...

I'm not skillful enough in the EW voodoo to catch the micro moves without using the items I'm familiar with. It's the wave of wave of wave of the wave thing that gets changed and that confuses me....makes me mad at myself, I think I'm making it too hard and not seeing trees for the forest.

premarket entry 37.39, sold at 39.00

38.75 sold 38.44

+1.30 on the day. meh, but I'll take it

Still looking to get the v though. History has shown EW to be accurate so I put more weight on down vs up, per the EW'rs call.

"No! Try not. Do, or do not. There is no try." -Yoda Levitation will levitate until levitation doesn't levitate. Rates be the key matey.
Thu, Oct 20, 2016 - 3:44pm
csquared13
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P = Insightful as always.  I

P = Insightful as always. 

I finished A Random Walk yesterday, and am now about a third of the way through New Market Wizards. So far, I really appreciated this lesson/story from Paul Tudor Jones after he made his biggest trading mistake in cotton in 1979:

"I am always thinking about losing money as opposed to making money. Back then, in that cotton trade, I had a vision of July going to 89 cents and I thought about all the money I was going to make on 400 contracts. I didn't think about what I could lose."

This resonated with me because in my recent forex foray, I was still focused on what I could win per trade, even though I always stuck to risk/reward of 1:3. Let me explain...even if I do 1:3 with safe position sizing (let's say 1% of trading capital per trade) that STILL doesn't mean I am thinking about loss enough because when I take my first string of losses, (drawdowns are inevitable) I end up too focused on how many rewards I need to get it back, and then trying to force the market to give it back to me...so without even realizing it I was overtrading (creating losses myself) and stupidly thinking "it's okay, I am 'trading'/this is what 'trading' is and I'll be fine if I stay 1:3."

No. I was wrong. I STILL wasn't thinking about loss enough. 

The plus side of this is that I didn't blow up my account, and I'm really proud of that. I stopped trading at roughly a 30% drawdown, and am now hitting the books and getting myself more prepared and balanced psychologically. FX is demanding IMO and I wasn't mentally balanced enough for it.

“Everybody gets what they want out of the market.” -Ed Seykota
Thu, Oct 27, 2016 - 4:24pm
csquared13
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Russell divergence perhaps

Russell divergence perhaps signaling something...careful out there. GLTA

“Everybody gets what they want out of the market.” -Ed Seykota
Thu, Oct 27, 2016 - 11:43pm
tonym9
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wow...one of the rare days

wow...one of the rare days today...had to share

The timing of my light work day allowed me to focus on trading....really focus....like get in tune with USD/JPY and JNUG/DUST like I haven't in quite some time focus. Every move I made was a winner. I held until I shouldn't have, then sold and flipped the opposite direction and did it multiple times today....just ridin the waves. One of my best trading days for sure. 

By afternoon my light work schedule had cleared and I was home by 3. Took a meal to a friend who just had a pacemaker put in, then took my wife to dinner, then enjoyed some quiet time together watching 5-0. Now as I sit back and reflect on today, all I can say is that I'm ready for another...wow. 

I'm in JNUG for a small ish overnight position, taken late day....figured I'd try an opposite direction flyer. Everyone (including myself) is saying gold/miners down...when everyone is going one way, it's time to go the other. Not a low risk position by far, we'll see in 6.5 hours when premarket trading opens on scottrade. 

I don't have a handle on directionals. I'm just playing what the market gives me, each day.

GLTA

"No! Try not. Do, or do not. There is no try." -Yoda Levitation will levitate until levitation doesn't levitate. Rates be the key matey.
Fri, Oct 28, 2016 - 9:27am
tonym9
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I think I'm gonna go buy a

I think I'm gonna go buy a lottery ticket today lol....the last 30 hours of trading have been lights out. 

This morning's trade:

1. DUST for GDP release to hedge the JNUG bought last night ...bought DUST at 42.91. Set a LSO at 44.00 per for the release, got hit seconds after the release.

2. Added to the JNUG at 10.70 after seeing what looked like a bottom in premarket at 10.50s for a 100% all in position....Sold entire position at 11.38

Currently flat.

USD/JPY is leading pm/miners....if you get into a dance with that chart as a leading indicator and don't step on its toes, you will be rewarded. 

Wow...I feel like King Kong...so it's time to walk away until Monday. GLTA. I'm taking the day off. 

"No! Try not. Do, or do not. There is no try." -Yoda Levitation will levitate until levitation doesn't levitate. Rates be the key matey.
Fri, Oct 28, 2016 - 3:23pm
csquared13
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OPEC Production Cuts / Saudi Aramco IPO

Just thinking out loud about some oil fundamentals..

Does Saudi Arabia need/want higher oil prices before they IPO? If so, does that increase the likelihood of an agreement between OPEC? 

“Everybody gets what they want out of the market.” -Ed Seykota
Fri, Oct 28, 2016 - 3:49pm
JAL
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For Old Times' Sake... (MY OTHER POSITIONS)

SHORTS:

SPX

FTSE

DAX

RUSSELL

$WTI

SSEC (LONG YANG)

US FINANCIALS (LONG FAZ)

USD/JPY (Stopped out... Ran out of money, so can't put it back on but who really cares.wink)

LONGS:

EUR/USD

$SILVER

GOLD

MINERS (Majors, Juniors, GDX, GDXJ, NUGT... Whatever!)

HAPPY HUNTING!!!

AC/DC - For those about to Rock (We salute you) HQ/1080p

All the best, JAL.

(It's been a rather long year.)

Sat, Oct 29, 2016 - 4:19pm
tonym9
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As a trader my job is to find

As a trader my job is to find situations where I can eliminate risk and maximize reward. Friday presented the possibility of a low risk/high reward situation. 

First, this possibility is based on politics and I'm not looking to start a discussion about that. 

Secondly, the possibility of Trump becoming president in my mind is slim to none. Even though I didn't early vote for a liberal progressive that is a potential criminal, I don't think my vote will amount to much and nor will those who are likeminded. But, the announcement of only the potential of emails/continued investigation of HRC had an demonstrable effect on the markets at 1pm yesterday.

This is an exploration of the effect of Trump as POTUS on markets.

JTFR, I didn't think Brexit would happen either.... If, and it's a huge if, Trump is elected POTUS there are several things to consider:

1. Overall markets will sell off

2. Gold will rise. 

3. My guess is an initial spike in gold overnight once results are released, then as overall markets deteriorate, a rotation into gold that could last at least until T-Giving. 

4. Gold could rise similarly to Brexit night, then continue upward for several weeks as the rotation and open interest picks up. 

So what's the anatomy of the trade?

1. The market has already priced in HRC. Therefore, if she is elected gold shouldn't really move too much either way. Summation: HRC as POTUS doesn't move gold, AKA LITTLE TO NO DOWNSIDE RISK. 

2. Trump becoming POTUS moves gold dramatically upward, AKA HUGE UPSIDE POTENTIAL. Evidence is friday's market move after 1pm on just the hint of possibility of something keeping HRC from being elected. Imagine the effect if HRC isn't elected for a moment....huge moves. 

3. Miners go up dramatically, and JNUG/NUGT go up even more. 

What are the potential amounts this could move?

1. Look at Brexit for a similar spike upon Trump POTUS announcement. Good for $50 spot I'm guessing, minimally. This will happen overnight, so NUGT/JNUG/GDX would gap up huge 11/9. 

2. The rotation is harder to guestimate, but I think it could rival the move up from Dec to Aug '16. Basically another $200-300 ish before TGiving. 

3. Look at NUGT from Dec 15 ish to Aug 16 ish...it doubled about 5.5 times. Cut off half of the movement for general discussion. 13 to 26 on the spike is totally reasonable. 26 to 52 and 52 to 104 is also totally reasonable through TGiving as gold OI goes way way up. Keep in mind, we have been reset with the past few week's action and are primed for a move. 

I will be playing this for everything it's worth and will be all in NUGT/JNUG by the close 11/8. 

My job the next few trading days to is get as big of an account as possible between now and then since I still expect to see gold go down from now to election. I would love to see it get relentlessly pounded, even waterfalled. That makes the shares of JNUG/NUGT/GDX cheaper before 11/8. I'll be playing hard for DUST/JDST moves until then, but will also be playing NUGT/JNUG the other way if the wind direction changes. 

This could be the move I was looking for with the roadmap I typed about a few weeks back. I'm not convinced Trump will be POTUS, but if so the move will be epic. I'm setting up for an election surprise with good upside and little to no risk. The perfect scenario for a trader. 

GLTA

"No! Try not. Do, or do not. There is no try." -Yoda Levitation will levitate until levitation doesn't levitate. Rates be the key matey.
Mon, Oct 31, 2016 - 8:47am
pailin
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disagree

Hey Tony, I see it pretty different (and am not trading* it, regardless!) Trump will get the popular vote. That may or may not translate into getting the requisite electorals though. This only goes one of two ways (imo):

1. Trump gets the electorals but they do not actually vote for him. They vote for Hillary in December. Chaos/volatility in all markets at whatever point this becomes 'known' and continues until that situation is accepted by all parties involved (including Trump).

2. Trump does not get the electorals, essentially same result as above except the chaos/volatility begins immediately as the rigging aspect is insta-pounced upon by Trump Camp. This may drag out for a while if their are recounts, paper counts, rejection of Diebold results and bogus dead ballot submissions, etc. But the energy will wane over time into the actual electoral vote. Again Hillary gets the electorals at the end of the day in December.

Those are the only two scenarios I see and in both cases gold and silver will rise into T-Day, per usual -it's seasonal anyway, then fade into year end. Possibly dramatically. Meanwhile a Hillary win, once fully digested and life goes on as we move into December...stocks pop big and we see a solid Santa Claus rally to year end. Dow 20k? Likely follow-through Q1 2017 too as EU continues to deteriorate, not to mention Deutsche collapse at any time....Euro, gold, silver will not be happy Q1.

All of the above a blend of myself and Armstrong, so it's nothing special, just OPINION :)

(*though I will be looking to rebuy gold/silver bullion much lower, and stocks -long term hold very soon if it's clear Hillary "win")

To the intelligent man or woman, life appears infinitely mysterious, but the stupid have an answer for everything. -Edward Abbey
Mon, Oct 31, 2016 - 12:17pm
tonym9
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Hey P. Are you getting

Hey P. Are you getting settled in?

Interesting take on the electoral college. My Son and I have been having that same discussion. He feels the same way you do. Also says that if the EC 'takes away or rigs" the election there will be serious civil disruption....and that it is a very real possibility.

Most do not know how the EC works ,or even its existence. They could find out in a big way. 

Here's my take....the people that vote Trump aren't the people that will riot if it (EC) goes against them. Most have jobs or the desire to work, are not part of the FSA (free shit army), and have something to lose in a serious civil disruption event. They WILL act on an individual basis though and things like sales of lead and dispensers and prep event items et all will increase. Also I think suburban/urban flight will pick up tempo as people of likeminded thought abandon population centers. 

BUT...take the opposite thought for a moment. If HRC loses, what happens as a result? um, yeah....

This assumes that Trump wins the popular and the EC becomes a possibility, which I don't think will happen. But I do think there is something to the non-admitting of support from Trump voters and this item could be very interesting to watch. Anybody but HRC in my mind so I hope Trump does win. 

Vote returns for me are better than the super bowl and I really dig the voting heat maps etc...I'm a bit of a geek when it comes to this stuff. It will be a popcorn and pepsi night for me for sure. If gold rocks like I think it will if Trump wins, I may stay up all night watching the coverage on the TV and cahrst on my laptop lol. 

Messy headlines related to anything Trump = potental POTUS or rigged election or anything not HRC = POTUS will throw markets into a tizzy... As a trader I like it. Volatility is good. Gold will zoom. 

right now I'm in JDST (entered this morning) and am awaiting the maturation over the enxt few days.

somewhere around 11/5 I will be looking for my JNUG/NUGT entry, by close of polls I will be all in

I MAY for my first time ever, use margin to go in very very deep. I'm still thinking about this. But if I'm correct about a HRC/limited downside and Trump/huge move up, it could prove to be very very rewarding with limited downside risk. What I might do is use my normal account for JNUG/NUGT/DGX and use the margin for miners...IDK, I'm sill thinking on it. 

IMO jury is still out on seasonals. I need to do some research on the 6ish week late seasonal hypothesis I have, just haven't done it yet. But, if the calendar is still happy with seasonals, gold should be a good play.

IDK about the overall market...I've been saying it's toppy for a while now and am yet to see anything significantly resembling that thought. 

Personally I'd love to see single digit silver and 3 digit gold after a nice rally...DUST/JDST would be epic and getting physical at those levels would be awesome. 

"No! Try not. Do, or do not. There is no try." -Yoda Levitation will levitate until levitation doesn't levitate. Rates be the key matey.
Mon, Oct 31, 2016 - 12:28pm
tonym9
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BTW, I think waterfall risk

BTW, I think waterfall risk is high right now.

USD/JPY holding over 105

30 yr UST 2.599

10 yr UST 1.84

GDX: having issues getting to mid 24's, keeps banging 24.teenish 

interesting to watch

"No! Try not. Do, or do not. There is no try." -Yoda Levitation will levitate until levitation doesn't levitate. Rates be the key matey.
Tue, Nov 1, 2016 - 7:12am
tonym9
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hmmmm.... instead of

hmmmm.... instead of waterfall it's waterup? Overnight up moves in both silver/gold, but USD/JPY is 104.99. I'm holding the JDST here for a bit longer but will cut it loose if G/S keep heading skyward. I'm surprised at GDX/GDXJ, I would have figured they'd be up much more. 

"No! Try not. Do, or do not. There is no try." -Yoda Levitation will levitate until levitation doesn't levitate. Rates be the key matey.
Tue, Nov 1, 2016 - 11:34am
tonym9
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scuttlebutt says this run is

scuttlebutt says this run is due to a new national poll showing Trump gaining and HRC losing ground. I'm at work so can't research as I'd like, but didn't the poll come out today? The overnight is where the run started ??? Is the Trump run starting early? FOMC is tomorrow so i'll prolly wait that out, but if this is related to the polls....oh boy is gold going to fly. We'll see. GLTA

"No! Try not. Do, or do not. There is no try." -Yoda Levitation will levitate until levitation doesn't levitate. Rates be the key matey.
Tue, Nov 1, 2016 - 2:46pm
csquared13
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Bought CSCO today in my

Bought CSCO today in my personal account.

Deployed some of mom's retirement funds to Biotech. BIIB and GILD look good to me. She's now 30% Equities, 3% Biotech, 67% cash. 

GLTA.

“Everybody gets what they want out of the market.” -Ed Seykota
Tue, Nov 1, 2016 - 4:39pm
tonym9
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I'm gonna hold for the FOMC

I'm gonna hold for the FOMC tomorrow as I expected a several day hold of JDST when I bought yesterday. However, I was not planning on a run up in gold like this today. Impressive action.

Candidly I should have mentally stopped out during the drive into work this morning but wanted to check some things before I did...by the time the morning work rush was over, too late. These x3's are like hot coals, you have to drop them fast when it goes against you.

BOJ and USD/JPY action today. Does it reverse on strong USD?

IDK, we'll see what FOMC can do tomorrow.

Will still JNUG regardless of what happens between now and 11/8.

"No! Try not. Do, or do not. There is no try." -Yoda Levitation will levitate until levitation doesn't levitate. Rates be the key matey.
Wed, Nov 2, 2016 - 1:32pm
silverwood
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HURRY!! Don't miss this offer...

Wed, Nov 2, 2016 - 1:56pm (Reply to #41383)
silverwood
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And now for the rest of the story

Wed, Nov 2, 2016 - 9:05pm
tonym9
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I wanted to hold the JDST but

I wanted to hold the JDST but instead I sold in AH at 24.45 and took my hit. Then I bought a 1/4 position JNUG. 

Last week my thought was calendar based, it went something like this: FOMC = Gold neg, Talking heads = Gold neg, Jobs = Gold neg. My timing was to flip from JDST on Friday jobs to JNUG. That didn't work out so well since gold has gone on a tear. 

So, I took a 1/4 JNUG tonight, will take 1/4 tomorrow and will buy the remaining half after friday jobs report. All to be held until at least 11/9

I feel like I'm chasing. But the action so far tonight looks good for gold as it knocks on 1300 again. 

HIP HIP HOORAY, A SECOND INVESTIGATION BY THE FBI ON THE CLINTON FOUNDATION IS HITTING THE AIRWAVES. 

GLTA

"No! Try not. Do, or do not. There is no try." -Yoda Levitation will levitate until levitation doesn't levitate. Rates be the key matey.
Thu, Nov 3, 2016 - 12:36am
tonym9
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Any traders using nadex.com ?

Any traders using nadex.com ? Binary options, contracts are $100 each with max win or loss of $100. I like the limited risk and a simple Y or N for a price at a fixed time/date. Trades Bitcoin, Forex, Gold, Silver, Oil, events, etc. It trades 23 HOURS A DAY, this I like. Chicago co reg'd by CFTC. 

Never traded with them, saw a ad on Bloomberg tonight. 

Gold 1307 hi ana hour ago, 1306 now....so far dumping JSDST looks liek the right move

"No! Try not. Do, or do not. There is no try." -Yoda Levitation will levitate until levitation doesn't levitate. Rates be the key matey.

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