Comments on: THE BIGGEST MISTAKE I EVER MADE TRADING

By: chase m

chase m — Fri, 04 Sep 2009 21:37:43 +0000

thank you for the shared anecdote

i would agree that over extension really splays you on the yardarm

not having followed your threads of 17 july, i remained short and you were indeed dead on; it has been tortuous slowly extricating myself from that

i can dca (dollar cost average) my way out of anything but a bankruptcy, but hubris of thinking one “knows” coupled with overextension makes for a potent and unpleasant experience

By: prescient11

prescient11 — Thu, 03 Sep 2009 02:16:24 +0000

And if my point wasn’t clear enough I apologize, we should be able to buy and sell whatever trading vehicles we want, and this comes from a guy who lost several ten thousands on srs.

By: prescient11

prescient11 — Thu, 03 Sep 2009 02:15:25 +0000

Btw, is this America or isn’t it. Are we a nation of fools.

Double and triple levered etfs function as theya re meant to. Anyone saying those are buy and hold vehicle are ridiculous.

Although I will point out that the decay factor would seem to necessitate some kind of rule against shorting them, because if you can take near infinite drawdowns, shorting both sso and sds makes a lot of sense.

By: JTodd

JTodd — Thu, 03 Sep 2009 00:46:18 +0000

Short both the 3X long and short funds was the best trade for the least risk in the last year.

Too bad for me by the time I realized this you could no longer short them and they had already lost most of their value.

The larger 2X funds (QLD/QID SSO/SDS) aren’t as bad but I’d still rather short them then buy them long.

By: TPC

TPC — Thu, 03 Sep 2009 00:29:48 +0000

Onlooker,

I haven’t done a formal update in the last week (though some emailers can attest to my short positions as they’ve asked me for advice on specific positions such as my housing short – which I believe I mentioned in a comment section a few weeks back) so they were never mentioned. Besides, they are so small that it hasn’t really been worth mentioning.

Trust me, I would never take credit for something that wasn’t mentioned on the site. Nonetheless, the derivatives shorts have performed really well in the last month. I am working on a model portfolio that will represent my ideas so my personal accounting will improve in the coming months.

TPC

By: Onlooker

Onlooker — Thu, 03 Sep 2009 00:13:02 +0000

TPC

I knew about your other derivative and non-correlated type assets that are a proxy for being short, but the 15% equity short position was a surprise as you hadn’t mentioned that at all to my knowledge. Last I knew you had pulled off your longs just under 1000. That’s why I asked. Once again, you don’t owe us any accounting of your positions, but if you’re going to tout market calls, well, you know…

Plus I value your guidance as you’ve made some good calls.

By: James

James — Wed, 02 Sep 2009 23:59:48 +0000

Actually, selling ATM or slightly ITM calls on the leveraged ETFs (as a directional position) has been working quite well for me. This way, the time decay and higher volatility both work in your favour. Example: if you thought financials were overvalued, then selling calls against FAS or UYG would make you money even in a sideways, choppy market as long as the underlying doesn’t go up significantly.

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What does SELLING calls have to do with buying the underlying stock? Selling calls for anything with high implied volatility in a side ways market will make you money…

By: Balinvadasz

Balinvadasz — Wed, 02 Sep 2009 22:55:36 +0000

By: James

James — Wed, 02 Sep 2009 22:15:11 +0000

James,

The lawsuits are coming. The time decay in the leverage funds and the rollover inefficiency in the futures funds has misled millions of investors….Sorry to hear you got caught up in that debacle.

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Oh, I NEVER got involved in these commodity etfs (well I did short USO a few times but that is it). But I talk to a lot of people who have lost a whole bunch in UNG due to its roll over costs and premium that continuously eats away at their money. Also…what really put the nail in the coffin for me was that oil is still over 100% up from its 52 week low while USO is up like what…35-40%??? No, not me sir. I am not in those things. If I want to buy for a natural gas rebound, I will buy some sturdy, small cap producers like GMXR (GMX Resources) or EP (El Paso)that have their production hedged…

By: Henry

Henry — Wed, 02 Sep 2009 20:44:28 +0000

all the EFT like FAZ, FAS are a bunch of scam product. If you hold for longer than a day then there is pretty good chance it goes down. Maybe it’s better to short BOTH of those EFTs. If you plot the two charts, you would see that they both trend down. I was looking at USO today..watch the time on these headlines
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* Futures Movers: Crude unchanged; gasoline rises on higher demand at MarketWatch(Wed 3:16pm)
* Futures Movers: Crude edges lower after inventories report at MarketWatch(Wed 1:29pm)
* Futures Movers: Crude turns higher on rising demand at MarketWatch(Wed 1:16pm)
* Futures Movers: Crude turns higher as EIA data show rising demand at MarketWatch(Wed 12:04pm)
* Futures Movers: Oil erases losses as data show rising demand at MarketWatch(Wed 11:25am)
* Futures Movers: Oil falls for third session after jobs data at MarketWatch(Wed 10:15am)