I’ve been slowly scaling out of shorts the past few days, while hedging for longs. It’s important to understand that if you are going to short the market and play the big bad bear, you have to know when to take profits and adjsut your portfolio. It really is the art of “wave-trading.” Stocks don’t ever always go up, and never always go down. I like to view trading as a chess match. Never brag or gloat (there’s a difference between gloating and celebrating) a position, and never be apologetic for a loss (which is not the same as being arrogant).
Take for example my plays to short solar. I’ve been banging out double digit gains left and right shorting stocks like YGE, CSIQ, SOL at their peaks. I didn’t mean to get the exact top, but it just happened that way. However, when we implement my style of wave-trading you’re not aiming for the peaks and troughs, just near them. That is why it’s more of a work of art when it comes to entering and exiting positions. Exiting the solar short trades took a lot more work and strategizing. I couldn’t predict the bottom of the correction, but at the same time I didn’t want to exit to early therefore if you’ve been follwing me we did this:
1) Take profits! We took profits in YGE and SOL (PCX and DRYS too)
2) Hold other winners: We held CSIQ
3) Hedge: Buy longs against shorts in sector that have a bigger potential for a squeeze. I went for JASO.
You know about the wins, but look how I minimized the losses on the rallies on the solar sector:
– Our hold, CSIQ, blasted off, and we are now almost break-even. However, our JASO hedge off-set about 1/2 of that, which is very acceptable. I never try to hedge against a position to get 100% protection. If I protect at least 10% of a gain, then I’m satisfied. It helps eliminate stress too.
– All that extra work was nice, but we already banked with shorts in YGE (+50%) and other plays. So today’s 3% move on the larger indexes was hard on the bears, but too late, we did our damage. Sit back and let the late bears jump ship.
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Great point Geo like your thinkin unfortunately I got short bad and my conviction didn’t turn as I was basically deaf to the the valid rally signs Monday fading into it real hard…boy did I pay by getting my face punched HARD. Hopefully this lesson will stick and make my trading a bit less gunslinger and more strategic.
Hey man, don’t get me wrong, I got toast too. we just gotta take the hits and move on.
You killed it man, especially YGE. Looking forward to more updates as I’m quite interested in the whole solar space. Currently long SOL.
Market is super flat today. this is bullish again.
GIO would you add to the CSIQ short if it move back to $14 range?
yes. it’s good to add these on the rips because that’s when the shares are available.
Gio, love the way you flow between long and short, that’s my ultimate goal. I see a lot of parallels in the market to sports. I played basketball every chance I could for almost 40 years, and always tried to be as good with my left hand as my right – it was a no brainer, and it’s the same here with long and short. In tennis it’s almost always the player that makes the fewest errors that wins. Hammering out wins in small positions, taking profits. I can’t imagine anyone with any degree of intellectual honesty and open mindedness, spending any time on iBC, reading what you masters are doing – not becoming a much better trader. I’ve even taken to saying “good day to you” sir to my 5 month old, and commenting about all the fuckery afoot. I have added Josh – dogging to my vernacular as well – that equals my old faithful “overly opinionated and under informed”
The doc is in the house! i love sports. if i’m not trading stocks, I’m playing ball. You’re right, if you can score with both hands you’re pretty much unstoppable. when it comes to stocks, it’s like playing offense and defense, and accepting the fact that sometimes the opponent will score on you. When it’s crunch time, 30 seconds to go and the game is tied, it’s the team that makes the fewest errors that wins at the buzzer. right on!
oh yeah, congrats to your 5-month old.