## Monday, November 08, 2004

### Once was Lost...Now I'm Found

I really tried. I tried to be the gun-slinging trader like Trader Vic, Livermore, and Jim Rogers. Someone who can cull through various sources of information and gather a trading conviction. Throw money at that conviction and hold strong until market reality meets market perception.

I'm just not that type of trader. I'm a system trader...thru and thru. These past few weeks have been horrible for me. I sold off my system positions which have all since gone on to fresh new highs. And shorted the QQQ which has held fairly steady around my entry prices. So, while I've lost very little money with my short position...I've lost much by being out of my system positions.

This was my last and final attempt at this type of trading. From now on, regardless of what happens with my QQQ short, I'm going back to system trading and development. In fact, this weekend alone I came up with 3 new ETF systems. What really stings, I came up with a system that is triggering a long position at Monday's open for the QQQ. This system has a 93% win ratio and an average profit of 5%. Ouch for my short position, huh?

Here's my plan. I'm going to watch the market before open tomorrow to try and get a feel of this week's direction. What really interests me is the US Dollar. Right now, it seems to be in a bit of a free fall. A continued free fall in the Dollar will garnish more and more attention from Wall Street. I have a feeling the US Dollar will become the single most talked about investment topic of 2005. This could indeed put a drag on the market and cause the Fed to raise rates much higher than anticipated. This will also keep the current rotation from small caps to large caps in the American market going strong. Large Caps can typically wither the storm better than small caps from the effects of the falling dollar. Most large caps are multi-nationals and thus a loss in American dollars are offset by gains in international dollars.

I'll hold my short position as long as the level of $38.00 is not broken. And take profits where they occur. I'll also look to initiate the new system trigger for the QQQ to go long sometime this week. Could be tomorrow if the$38.00 level is broken...otherwise I'll wait until a time I deem appropriate. My main point is to liquidate my hunch trade and gradually leverage back into my open system positions.

Received system triggers this week. These stocks were triggered as longs for Monday's opening: AVTR & ERIE. Both of these stocks were triggered by the TightUptrend Weekly system. This system looks to enter stocks whose range is very narrow and uptrend is well defined. These systems trade off weekly data and typically hold positions 6 months to several years.

Received a few triggers for closing existing positions:
• Closing SMSI with current profit of 13.64%;
• Closing PFSW with current profit of 10.53%;
• Closing MCD with current profit of 4.92%.
Current open system positions:
• 2 QQQ systems with current profit of 3.49%;
• 1 QQQ system with current profit of 2.84%;
• CVT with current loss of -2.36%.
I have several positions from other systems that are still open and will build a table of that data to publish in the days ahead.

Until then...

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.