Damir's Trading Journal

[damir00]

leverage would be the same, but the gain would be (potentially) bigger since you're choosing from the better-performing part of the dow. it's the same thing zeev does with his "Q": play a market turn with a handful of hotties.

Quote from OnTheEdge:

Ya, but if we're going to buy a small basket of DOW stocks, won't we have the same leverage problem, or worse, than we have with the DIA?

 

[damir00]

ok, this is what i will try tomorrow: when i get a long/short signal, i will do a paper trade on the three best (if long signal) or worst (if short signal) dow components based on previous day's performance. if i forget, somebody remind me. for right now i will use equity pricing, not SSF pricing: one variation at a time.

Quote from damir00:

leverage would be the same, but the gain would be (potentially) bigger since you're choosing from the better-performing part of the dow. it's the same thing zeev does with his "Q": play a market turn with a handful of hotties.

 

[OnTheEdge]

Makes sense. I never got around to checking Z's thread; the buzz, you know.

I was doing something like that in my own way, too, till maybe a month ago when the market went against me, and I let my profits evaporate and am still impotently watching them go down, down, down.

I feel strongly they'll recover some day, but basing current strategy on that idea leaves me strapped for a long time, till they do. The part of the strategy that didn't exist, actually, failed. That was the part about when to sell when the trades go against you. I knew when to sell when they were with me, (any time is good, then!) but not when they went against me.

 

[OnTheEdge]

The method of the three best and worst from the prior day sounds possible, but it doesn't take into account the contrarian principle by which you operate. Wouldn't they correct the next morning?

 

[OddTrader]

Quote from damir00:



if that's how you feel, why would you let it?

Let the market decide!

 

[OnTheEdge]

OddTrader: Aren't we trying to beat the market, rather than let it beat us?

 

[OddTrader]

Quote from OnTheEdge:

OddTrader: Aren't we trying to beat the market, rather than let it beat us? [/QUOTE

Most likely:

In a trendy market, we beat it.

In a sideway market, it beats us.

 

[damir00]

i don't know. that's part of what i'll be trying to find out.

Quote from OnTheEdge:

The method of the three best and worst from the prior day sounds possible, but it doesn't take into account the contrarian principle by which you operate. Wouldn't they correct the next morning?

 

[OnTheEdge]

That's what I've done wrong. sigh.

Quote from OddTrader:



Let the market decide!

 

[OnTheEdge]

This is interesting. Even though the DOW isn't in a better position than when I bought the DIA, they are profitable now. Not profitable to be worth a sell, but ten or eleven cents higher than my av price.