We had 2 plays in baseball yesterday and both lost. San Diego never had a chance to win. But KC down 7-1 came back and tied it up to go into extra innings after surviving a no out bases loaded in the top of the 9th. But their relief pitching ineptitude got the best of them and they finally lost 9-8 in what turned out to be an exciting game.
Today 3 home dogs in baseball and nothing has been rulled out yet. I will update if anything develops.
We are carrying 2 swing trades today and the market looks like it is going to gap down almost 1% on the open this morning. The market is getting into the area of being oversold and I will be looking to put on swing trades most likely tomorrow if this weakness continues.
I was looking through your archives and noticed that in March someone asked about your swing trades and if you were still doing them. Your response was “yes” but that they were so infrequent you didn’t want to post them. However, since you started posting again you’ve had over 40 trades in like 2+ months and I was wondering if you changed your methodologies to get more swing trades or its just been a naturally busy time for them?
Lastly, I was wondering what you think of using 25-50% margin for these trades? Out of 40 you haven’t had any lose more than around 5% and 90% of the gains/losses are in the 3% or less range. Since the trades are only for 4-5 days or so, the margin interest is pretty small.
Anyway, keepup the good work your blog is a must read!”
Yes..I did change methodologies. I always knew that there were opportunities in mean reversion trading since I do extensive reading on investing daily. Before when I posted them originally I took my basket of stocks in the hedge fund top 5 list and simply traded them when I thought about it …when the rsi(2) became extreme. It worked out well but I never really did anything much more then that.
I then came across ripe trade and system trading by woodshedder. There are 100s of sites out there on swing trading using as many different methods. Those two sites in my opinion are the best both in explaining their methods, tracking their results and getting value if you decide to subscribe to their service. I do not take all their trades that they recommend since I wait at times for the market to be very oversold…and in addition have several screens I use on the stocks they have for swing trading as a further filter to attempt to minimize the risk of a “black swan” event.
I would not use a margin for any of these trades. Using margin might work out…but it just invites disaster. First it will cut into your annual return along with whatever commission you are paying. 2nd it invites over speculation. If you have a rule not to use margin you then have a built in safety device.
Now if your were a computer or a Vulcan making these trades I could see the logic behind it. Also if you were a seasoned professional gambler that never tilted or got flustered( I have not run into many of those) maybe. But being from the human species that I assume you are:)….we all have some sort triggering device we have to keep in check. And not using margin will protect you from that.
If you tilt or get off base playing poker you can usually get saved by the game ending at some point. The markets are not so kind to you.