At the moment I am holding several strategic short positions against gold stock positions that I am in the process of reloading after the decline from the predictable (in NFTRH) resistance in the HUI 375-400 area. These shorts may or may not end up being successful taken individually, but they are not in the speculative portfolio so that I can make knock out trades and brag about them here. They are in the port to help me be a stronger buyer and holder of the main big picture bullish area (IMO), the goldies.
In other words, I resisted the urge to dump these things as a trading jockey and take profits and instead am being what I usually am; a bottom feeder, portfolio tweaker and longer term swing trader. My self-taught method has worked to the tune of +194% since 2002, when I began managing my own accounts. Over that time, the S&P 500 is about even.
Why the tout? Because, while an annualized 20+% is not as sexy as the gaudy figures you see in those trading service advertisement cartoons, it is real and it is reflective of a long-term system that works. I understand who I am when I show up each day to the markets. I understand that I sometimes hold positions that I am fairly sure are going to lose me some money on paper in any given short term scenario. I understand that in my trading world, some things balance out other things and have relationships to each other that are not readily apparent on the surface. I understand that I need to be right about some intermediate and long term trends and then make many adjustments in any given year.
Most importantly, I understand that I need to manage risk at all times. Much of this comes from my background building, shaping and operating a real world business in a sector that much of the world has left for dead, US manufacturing. It has been necessary to be adaptable, progressive and strategic which not coincidentally are things that go into my approach to the markets.
In short, I know the trading style that works for me and that is why I am one of the 10% who can make money in the markets. Start with Reminiscences of a Stock Operator and work your way out from there. Meanwhile, understand that we are all different and there is no one size fits all if you are going to do this yourself. The only other options are to use a canned, automated service, submit to a guru or go through the process of trying to separate the pretenders from the real deals in the financial planner herd.
Meanwhile, Jeffrey Kennedy has some good basic tips to trading here: Five Fatal Flaws of Trading
