Satuki @ Home

I think I am back in the normal production mode.   What I mean by that is that I trade normal stocks now.  I had a lot of excitement trading those leveraged ETFs in the past couple of months.  But excitement is bad for trading.  Good trading is supposed to be boring.

It is very easy to make trading mistakes when you push for performance(trading these leveraged ETFs is one).  Avoiding trading mistakes, or reducing the number of losers is probably as important as every other fundamental trading rules. Assuming you trade 5 days a week and position size is about the same for each position, if you lose 2 days and win 3 days, I am not going to say you only have one winning day since there are some other variables.  But your total profits would be greatly diminished by those 2 losing days, not to mention that time and energy you spend trading, which is your opportunity cost. One of my new rules now is to try to stay green everyday even if I am up 1 cent for the day.  So far I have been green 4 days in a row since I went back trading those good old stocks.

My long time pets are rimm, aapl, gs, fslr and bidu.  I pulled out the charts of Drys I scalped like crazy in 2007.  On one typical trading day, I could go back and forth(short and long) on Drys a dozen times.  And the number of shorts and longs were very even.  I would long Drys at 11:00 and flip to the short side on 11:15.   I tried on AAPL today(shorted it first and flipped to long it later).   I believe this kind of mental flexibility is important. I sometimes sit in a bearish mode even though the market is trending higher.  This is very lethal.