Seeking Alpha
  • Hypnos7
    Is it just me, or do the UNG and SLV charts look rather strange the last 4 days?
    11/2/12
    Reply (16)
    • Will Erlandson: It's not just you. There's a shift going on. Through most of OCT, crude and Euro interplay with gold and /ES was a leading indicator.
      11/2/12
    • Will Erlandson: Markets turned indecisive last week. I'm not trading the election, but theorize we resolve uncertainty to the upside regardless of outcome.
      11/2/12
    • Hypnos7: You are theorizing cautious trade? It is true that on these charts volume has been waning, creating small flag formations.
      11/2/12
    • Hypnos7: For UNG it's a bullish flag, for SLV a bearish flag ... but UNG may have broken lower today.
      11/2/12
    • Will Erlandson: My 2 biggest positions are long AAPL, short bonds w/ various premium selling against. Have been for weeks, and will continue unhindered.
      11/2/12
    • Will Erlandson: I'm not "playing" the election, but speculating that resolution of uncertainty tends to result in a temporary rally.
      11/2/12
    • Hypnos7: If you are uncertain of the market direction, selling premium is a wise move ...
      11/2/12
    • Will Erlandson: Yep. Small reserve for scalping if I start to see patterns like the ones we're talking about, but still new so I'm cautious about it.
      11/2/12
    • Hypnos7: Just remember, risk control is God. I use 2% capital risk per trade, I find that I sleep well with this number.
      11/2/12
    • Hypnos7: Note that this 2% is the distance between my buy point and sell stop, so this does not take into account big overnight gaps.
      11/2/12
    • Hypnos7: Real risk is higher, let's say 3%. This means that with a 3-sigma streak of losers I still only lose 33% of my capital.
      11/2/12
    • Will Erlandson: May I ask what your approx. percentage of winners vs stopped out is? Agree on risk management, lowering cost basis. Rest works itself out.
      11/2/12
    • Hypnos7: In my trading models ~50%, but my calculation above is assuming ~40% winners
      11/2/12
    • Will Erlandson: Nicely done! I've been trading without stops, relying on cyclicality and duration. Toughest part is psychological when a trade goes bad.
      11/2/12
    • Hypnos7: I'm a trend follower. The idea is to keep losses linear, and let winners be exponential (via compounding), so I always use stop losses.
      11/2/12
    • Hypnos7: if I get whipsawed I just live with it, look for the next low-risk entry
      11/2/12