You guys you guys

S

shark

I was just sitting and thinking damn it sure is hard to trade individual stocks when you have to keep checking up on the market in general, and then it hit me.

What if i hedged the stock I was trading with another stock or and ETF or an index. That way I would be mostly safe from general market fluctuations. At first I was like no way this is way too crazy to work.

8 hours and a wikipedia search later,

I realized that I discovered beta and sector neutrality.

Woohoo making progress.
 
I thought I coded a pretty neat indicator the other day... Then I found out the EXACT design has been around for about 30 years.

Making progress!
 
Quote from shark:

I was just sitting and thinking damn it sure is hard to trade individual stocks when you have to keep checking up on the market in general, and then it hit me.

What if i hedged the stock I was trading with another stock or and ETF or an index. That way I would be mostly safe from general market fluctuations. At first I was like no way this is way too crazy to work.

8 hours and a wikipedia search later,

I realized that I discovered beta and sector neutrality.

Woohoo making progress.
More...

This is why stops were invented. You only need a hedge if you're managing billions of dollars. If you can get out of your stock in 3 seconds, a hedge will just be a drag on your returns.
 
Quote from billyjoerob:

This is why stops were invented. You only need a hedge if you're managing billions of dollars. If you can get out of your stock in 3 seconds, a hedge will just be a drag on your returns.
More...

Well maybe I am managing billions of dollars :O

But really to me it seems like stops would be ineffective since the market can just go right through them.
 
Quote from shark:

I was just sitting and thinking damn it sure is hard to trade individual stocks when you have to keep checking up on the market in general, and then it hit me.

What if i hedged the stock I was trading with another stock or and ETF or an index. That way I would be mostly safe from general market fluctuations. At first I was like no way this is way too crazy to work.

8 hours and a wikipedia search later,

I realized that I discovered beta and sector neutrality.

Woohoo making progress.
More...

That could work. Also, try and stay away from any form of systematic risk in general if that's what you're looking for.

Trade speculative stocks, or small caps.
 
Quote from chrisjs87:

I thought I coded a pretty neat indicator the other day... Then I found out the EXACT design has been around for about 30 years.

Making progress!
More...

lol. Reminds me, same here, I had a pretty neat indicator then maybe it was 2 months later I found out it had a name and was called a tweezer bottom. One thing led to another and pfffttttt..
 
You must log in or register to reply here.
Back
Top