Sticking to My Guns for Now

If this pans out the way I think and have advocated it will for the last several trading days, then we will have to take a look back and really learn something about Wall Street and just how far ahead of the information curve they really are. In this case, it seems the rally was based in large part on bets that a Senator would pass away before the vote on financial reform.

I'm still behind the positions listed in the last several days-Gold seems to be working out, some embers took the short on GLD a step further and made some money today on short/leveraged inverse Gold ETF's and made a nice gain in a few hours.

Today was a "nothing day" in my opinion, you can see the charts at Trade guild tonight.

I will just say for those who haven't taken positions but want to, our idea was to add some of these longs today on weakness-better pricing, better risk profile, but we don't want to get too aggressive until we see proof. What's proof? The SPY breaking above it's base around $108.50, certainly a move through gap resistance from the 23/24th of June around the $109 area, that would be enough for me to get pretty aggressive on filling out these positions.

Now the alternative to what I laid out on Trade Guild tonight is that the Byrd event changed the game, that it was an unknown. I doubt this to be true, I wouldn't be surprised if his caretakers were on the phone with Wall Street giving them updates on his health. So for now, nothing has changed yet and the plan remains the same, but we also have enough good trades there that I don't think it's wise to stretch the charts looking for more trades to fill out the list, although I did add a few to the list tonight-be careful as they are all in the same industry group, you don't want correlation, however a short and a long will work. If they aren't trades we are investing in or would invest in, I'm not listing them. Patience is your edge over Wall Street, it's a tough edge to take advantage of. Emotionally and logically we have the idea in our heads that if we are not working or doing something, we are not making progress. This simply is not true in the markets-it's your single greatest advantage.

Another misconception is the "I have to get a 70% to pass". Not in Trading, think of it like baseball, would you be happy with a 400 batting average (40%)?  I think so. Risk management  is so very important and it allows us to have a 300-400 batting average and still double our portfolios. Get over the "I have to be right more then I'm wrong" attitude, get over the "70% is a passing grade" and get over the "I don't want to take a loss".

If you can't take a loss, while it's small, eventually you WILL take a loss that will cost you dearly. This isn't about being right, it's about making money. So for now, observe, watch the markets, be ready to act, understand that you are not in a battle of wits with Wall Street, you are in a battle for cash and you don't have to outsmart anyone or be right more than you are wrong. Like they say, "Do you want to be right or do you want to make money?" It seems like a simple question to answer, but i think we've all been in the, "I don't want to be wrong, I don't want to take this loss" camp before. your job to be a successful market participant is to retrain your thought process, rid yourself of ego, and do the things that just do not come naturally.

As for tomorrow, yesterday's trades could be pretty nice trades, I think it won't happen first thing in the morning, but you'll want to watch for updates and add at those tactical levels I laid out above.

Finally, Welcome new members, thank you to our members that continue to support team Wolf.

Have a great day, and lets see if we can't take some money from some sheep.