Had to post this tonight in response to the countless articles and such I am asked to interpret, weigh in on, and other various forms of garbage I am asked to dumb myself down to suffer through each day. Guy reminds me of J Krull from long ago. This is now my favorite trading related video of all time.
What if? Lol.
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What if I’m scared of big dogs??
“We’ve been in an uptrend for FIFTY THOUSAND FUCKING YEARS”. So good!
Hahaha. This dude is bad ass
I survived this selloff okay (so far!), so I figured I’d share my strategy for any newer folks around here, mostly because this is really F*ing hard.
As of July 1st, more than half of my account was in $DLTNX and Wells Fargo preferred shares. The rest was trading options. I more than doubled my account prior to the selloff and obviously hit all-time highs.
OA had mentioned, going back at least 8 weeks, that he was expecting a choppy October. About the third time this came up, it finally hit me, and I started planning. Even as things were going great.
I tried to assess how I could best manage rising markets into potential chop, with a potential big move following the October chop, so I decided to plan for the following:
-upon a sale of a large gain, set 50% aside in cash.
-dedicate approx. 40% of the balance into a long term (i.e. Dec or Jan) option in a boring old man stock.
-dedicate approx. 10% to high beta names that I believed would be less correlated to market moves.
-hedge with tactical shorts as the setups presented themselves.
I had a streak where I closed a position four days in a row that was greater than 400%. It was painful to leave a lot of that money on the sidelines, but I fought the urge. This resulted in long dated positions in $USG, $SBUX, $WBA, $CRM (which was an old man stock before they tried to buy $TWTR), $JNPR, $YRCW, $GILD 2018’s, $LEN (oops), et al with 60+ days of hold, and then $TWTR, $FIT, $NMBL, $JD, $RH et al as my supposed uncorrelated higher beta. Obviously based on that roster, I’m batting much less than 1.000, but I’m still surviving.
My belief was that I would be best positioned for whatever came. If there was chop, I figured the old man stocks would be less susceptible to an aggressive sell off, and would be the leaders out of a sell off if risk reset. I further expected if I found a few high beta names that seemed uncorrelated to the market, perhaps a sell off would treat some terribly, and some would survive a sell off and result in gains. And my portfolio would be buffered by a large (and growing by my successes) cash position. If there wasn’t a big October sell off, then I would still be positioned heavily long, and my aggressive high beta names should perform well even if my old man stocks lagged the breakout a bit. But I’ve learned (the hard way) that not profiting best during the up times will position you to survive the down times.
I certainly don’t pretend that the chop is over (I expect at least somewhat more downside), or that this was perfect market timing, instrument selection, or even strategy. But my account is less than 10% off of its highs. This type of move would have ordinarily put me on the mat and taken me months to recover. The fact that it’s happening on the eve of expiry week (with one of my highest exposures ever) underscores the value of sticking to a plan. I thought this was at least a bit relevant given the discussion in AHWOA last night.
Good luck out there.
(Last note: I actually had to look up my account balances to figure out how I’d performed and if I’d made all time highs or not. I never look at it. That’s probably OA’s number one recommendation- Judge a position based on its structure, not its impact on your account – you should have addressed that when you initiated)
Quality post. Thanks for sharing your thoughts, discipline, and approach.
1. DON’T GAMBLE
2. HAVE SOME MENTAL GAME
3. LOVE YOURSELF
This guys youtube account is a goldmine lmao
This is rly good. Thanks for the insight.
RED ALERT!!! http://www.businessinsider.com/hsbc-red-alert-get-ready-for-a-severe-fall-in-the-stock-market-2016-10
Sorry, you lost me at F*ing. Please spell out expletives on this blog.
LOL.
Have to post THIS, just to illustrate:
What if I look up this guy…
who runs 3 web-sites, but actually doesn’t write posts himself…
Sells Forex trading systems, while touting long term stock investing…
Lives in rat-infested shit hole in Brooklyn, but claims a 35 years successful investing career…
Wonders of interwebs…
I don’t even know who he is or what he does. Wasn’t interested to look. The things that were said need to be heard so that people do develop survival skills for this sport.
Good point. Even If someone is a homeless guy on the street, if he has wisdom that can help us out in life, we would do well to listen to him.
Da trut’ is da trut’, no matta who sez it.
Ya, the guy in the video is the same guy that was on CNBC just before the financial crisis, balls deep in his bullish stance, telling everyone that housing and subprime weren’t a problem.The video clip is of him and Schiff (not a Schiff fan) on CNBC. Despite all of Schiffs bad calls; in this particular video clip, he looks like a G. Schiff turned out to be dead right and this guy in the video lost his ass.
I like that he’s ballsy and sticks to his guns though. I agree with his approach to life, but his “long term uptrend” thesis doesnt seem to have worked out very well for him. Since ’08 his life appears to have been in a 8 year downtrend. Oddly, despite being similarly wrong the past 8 years, Schiff may have done alright hawking coins and foreign funds to people. Goldbugs are a loyal bunch I suppose.
Really? That’s interesting. Never seen him before, but appreciate the color.
Ya, his name is Mike Norman. he’s a big proponent of the economic school: Modern Monetary Theory. Still a bad ass video and a good way to view life. Like everyone, he was wrong at a pointmin his life, it was just noteworthy becuase he was wrong in an epic way and in super asshole braggadocious style, made for good TV.
Maybe a sign that I found his video at this point, where the market trend gets choppy? Bad omen.
Interesting. Sounds like it’s possible that the guy in the video gave good advice but perhaps didn’t follow it himself. Still, good advice is good advice– even from people who don’t follow it.
In a way it’s only natural. It’s a lot easier to say wise things than to follow them and act wisely. One of the interesting contradictions of human beings.
People who bought the market in 2007-09 downturn, even if they bought the top– if they held on, they are doing just fine right now. Of course, it’s different with options. But no one has to put their whole bank account into call options during a downturn. People can keep some cash when it looks prudent, and spread out their trading over time.
How can I tell what the NYMO is on a daily basis?
Look at it.
Wowzer
http://stockcharts.com/h-sc/ui?s=%24NYMO
Is there any live versions, so I know what it is today?
I bet your trading platform has one? Mine does.
It is today what it was yesterday at market close. It is a statistic derived from the number of stocks that closed higher (advances) vs.the number that closed lower (declines).
Read about it, so you know what it is, before you try to make use of it. Trading is more complex than it appears at first. There is a lot to learn.
https://www.mcoscillator.com/learning_center/kb/mcclellan_oscillator/the_mcclellan_oscillator_summation_index/
Do people calculate it during the day too? I haven’t seen it.
Put $NYAD as a stock symbol in stockcharts.com
Then plot MACD indicator with 19,39,1 parameters – thats your real-time NYMO. The readings on price scale will be different, but wiggles of price plot are (almost) the same.
The difference comes from ratio adjustments in McClellan oscillator, but it accumulates over time, and doesn’t make big difference for intraday analysis.
Hope it helps
Interesting. I guess if you compute it intraday, you must have to keep pretending the market has already closed, and looking at the data that way. Maybe useful for HFT traders who might be trading off of a millisecond chart.
Thanks, I also found it in thinkorswim as a study
J Krull – lol – wonder where that guy is these days…
Probably talking about SHORT INTEREST
lol +1
J Krull @hitthebidradio
Still entertaining….
WTF Frog! I just assumed as a the blog’s pom pom girl, you were certainly at least a subscriber. Yeesh! If you were a subscriber to OA’s fine service, you would have known how to calculate the stat intraday. Put a crowbar in your wallet and pony up!
I attended a Boot Camp. And I may attend AHWOA at some point. But I am not a short term trader, so intraday calculations of the NYMO are not of any use in my particular trading/investing style. I don’t use charts where the market “closes” every five minutes.
And I am no pom pom girl.
Shorting every rally has been the only thing kept my losses at a bearable level this week.
Always shorting those bottoms. Good work.
Umm…? ok
Added some GS calls for earnings play
Into a gap up? Can’t break that habit, lol.
$GLD looks ripe here
Prepare yourself for a steep selloff….looks like 1987 all over again.
Fucking brilliant. Just loaded up on this gap fill today
1987? Not sure how to came to that analogy
Go all in on some 110 QQQ put’s then if you’re so sure perfect opp for you
Ok clearly you don’t understand sarcasm.
How many times do we have to see these stupid 1987 parallels ?
Keep buying those twtr shares. Lol. What a shit show
Bro, you said the same shit at the same price months and looked fucking retarded in the end. I’ll gladly fade you any day of the week.
Time Stamped: http://ibankcoin.com/option_addict/files/2016/08/bchutwtr.jpg
Be my guest bro
Lol – awesome.
Haha.
Closing all shorts /puts here. Maybe premature. But I’m hungry and want to go to lunch and will not hold over the weekend. Good luck out there
Grats on CRM, OA.
Thanks
Added big chunk of WFC today, really like the long term chart
OA – how much if any profit have you made this year?
+90%. Was up +140% as of last month, gave some back these last few weeks.
Not bad big cheese, but 90% of what, how big is your bank roll – 100k? 200k?
BTW – the video of some jacked up fruit loop who looks like he lives off the grid and looks like a doomsday prepper doesn’t do your blog any favours. Quoting b-grade movies and survival skills – not sure if your having a laugh or have just lost it, but watching some clueless ( “me against the world”) dude was cringeworthy.
Wait…I give a fuck what you think?
Don’t mind this guy. He suffers from lucid delusions that he’s Simon Cowell.
I personally am inspired to become an”BIG DOG”
Mike Norman writes articles for The Street – Real Money – and has been a permabull for years and years. Of course – that said – he has been generally right for years and years. He also has a Modern Monetary Theory website/service which arguably does not have many followers since his sometimes daily YouTube videos usually just have hundreds of views. His articles and videos are sometimes discussed by some of us at a blog entitled free to talk and trade – and for the most part we find them humorous because they have an “I was right or will be right” attitude. An example of how some people think he is a great trader and others think he is somewhat of a charlatan took place the beginning of this year. Every day or few days – while the market was getting poleaxed – Norman put out an article or video that more or less said people were idiots for not buying the market with both hands. Of course – the market more or less went down for 5 to 6 weeks and the whole time Norman was saying every day or few days “You idiots – buy this weakness.” About the middle to end of February – after the market had clearly turned – Norman had a video where he proclaimed he had called the market perfectly as it was clear he had bought weakness at the exact right times. Of course – anyone who had bought big the first 4 or 5 times Norman had said to do so in the first few weeks of January 2016 were clearly underwater as Norman had said to buy big during that time. Those who thought he was full of it pointed to how anyone who followed his advice was big underwater and that of course he would declare he was right whenever the market turned whether it had been middle of February which it was or at any later time.
LMFAO at “the universe has been in a fucking uptrend ” This yahoo is hilarious. He’s obviously been chewing on a little too much khat.
Modern Monetary Theory is interesting stuff, whether you agree with it or not.
http://neweconomicperspectives.org/modern-monetary-theory-primer.html
The weekly chart on Yelp looks like aversion.
Top 2 video of All Time!!!!!