Monday, November 08, 2004

Fade the Taylor

"I think the most important thing to do is to develop a system that you have confidence in. You will get nowhere if you are second-guessing what you are doing. When the market is open, you need to know what you are doing, and why you are doing it, without thinking too much about it. If you start thinking too much about what you are doing or second-guessing yourself, you will quickly get taken out of the game." -- Phil Rosten
Officially out of my short position in QQQ today. You know what that means? Start shorting. :)

I was able to leverage back into my weekly long systems today as well (in addition to the recent QQQ long system trade). I only have a couple of securities that I wasn't able to get into...just because they have moved too far. Hopefully, I can catch them in the next few days or weeks.

To witness some of the pain I endured while missing the election move...look no further than the following Marketocracy 6 month performance chart below. In particular focus on 11/01/04 and beyond. That's when I sold my systems and shorted the QQQ.

The above chart reflects the Marketocracy virtual fund I maintain of my system trades. I've always had compliance issues with the fund...mostly because I maintained too large a cash position. But, recently I've cleaned it up and achieved compliance. This virtual fund is much more conservative than my personal portfolio...mostly due to the many rules & regs involved in running a fund. And much harder to trade systems that are short in duration. So, most of my trades in this fund involve my long-term weekly systems. If you can remember to maintain the is a nice way to track your performance. Might be worth a look...registration is free.

Daily System Updates
  • Closing 1 QQQ system with current profit of 2.95%;
Current open system positions:
  • 2 QQQ long systems with current profit of 3.60%;
  • CVT long with current loss of -1.57%;
Pay attention to the fed meeting on Wednesday. I'm curious if the Fed will throw any words the falling US dollar's way.

Great little write-up on the investing public's pricing mechanism for stocks. I've always assumed that market participant's price stocks according to future good or bad events. But, after my recent debacle with hunch trading...maybe I had it all wrong. This article explains market participants might just pick stocks by extrapolating the present to the future. And disregard any notion that the future may be different from the present. Interesting. Why didn't you write this a week ago? :)

Good post regarding the habits of Ineffective Traders by Ken Wolff. I particularly like his write up on item #7, "A defeatest attitude". An old saying is the most you will get out of life is what you ask for. If you put your house up for sale for $140,000...nobody is going to drive buy and offer you $200,000. Unless you live in California. But, the point is, you control how high you reach. Don't limit yourself.

Please read the disclaimer on the website. This is not a recommendation to buy, sell, or trade securities. Just a journal of my travels through Wall Street. I can buy, sell, or hold any positions mentioned on this website at anytime. So, be warned.

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