Today's Trading Score (Jan 4th)

Due to a dental appointment, didn’t get online until after 3 o’clock eastern. Did some bottoming fishing. Submitted ten orders. Got 6 fills. Ended the day with 1 loss, 1 scratch, and 4 wins, netting 100 bps on the money risked. Happy as a clam.

What I’m finding to be the killer combo --for me, at least-- is requiring that fundamentals and technicals be in synch with each other.


Today, took myself flat on five of those positions, accepting 2 losses among them for net 24hr gain of 80 bps on money put at risk. Happy as a clam.

Consider this. 80 beeps per day times 250 market days per year is a 200% gain, right? but also totally unrealistic. So, deleverage the money put into the market by a factor of 20. Now the hoped for total gain across the whole portfolio is a modest 10%/yr, or the historical long-term average offered by being fully invested in large-caps, for which the SP500 is the customary proxy.

So, do this. Dump a portion of AUM into such an index, another portion into low-risk assets, keep a reasonable cash position, maybe a small allocation to PMs, etc., and the 5% one is actively trading makes sense, without creating undue portfolio risk. Why worry about managing risk? Because a crash is coming. How soon? How bad? That’s anyone’s guess. But saying it won’t happen, because it would be ever so incovenient, won’t prevent it from happening.