Sunday, February 19, 2012
New Service.....Education
We have decided to add education as part of a free service to our website. Our "TCM Investment and Trading Education" segment will occasionally provide instruction on many subjects that interest our readers. Enjoy.
Friday, February 17, 2012
Very Interesting......TVIX
VIX doiwn 7.5% and TVIX down 3%. Why is this interesting? because TVIX is supposed to be 3X's leverage of the VIX- it should be down about 21%! The volume is been enormous- about 600% to 700%. What is going on here? Our hunch is that there has been huge accumulation; but for what? Why? It is a little too early to tell and our entry point is back around 13.50 to 14 for now; however, this needs to be watched closely. The S&P500 technically can go 1400. This is not too far away. Watch out for a violent pull-back at or close to this level. Stay tuned and check emails for strastegy.
Saturday, February 11, 2012
Rules Broken and Lessons Learned...The Ultimate Trader's Trap
We broke a lot of rules on the TVIX trade. Rule number 1: Don't ever "paint" yourself into the ultimate trader's mistake - "The Intellectual Trap". We will get back to the mistakes that led us into this death trap.
An "Intellectual Trap" defined: Trader's by definition fall into the group of highly competetive individuals who consider themselves (right or wrong) extremely intelligent. An "Intellectual Trap" develops when the trader thinks him/her-self far superior than the market. They just "know" that they are right and everyone else is wrong. They can't believe how dumb the market is! They get angry when their trade is losing. Wrong way Charlie! An excellent trader knows that it is not how smart they are; it is the ability to read when the crowd will see what they see. They may be spot on; however, being early can kill your capital. This is why trading the markets has caused many very smart traders everything. It drove them mad. The "Trap" comes when you are so convinced that you are right and your theory is so brilliant that you are subconciously willing to go down with the ship (and so does your capital)!
The Rules:
1. Never go down with the ship! Who cares if you were wrong. The goal is not to be the smartest person in the room; the goal is to make the most money. Socrates said: All that I know, is that I know nothing. A smart man. Surrender the ego.
2. Always use stop losses. These protecd you from yourself.
3. Just when you think you have it all figured out is when you are the most vulnerable.
4. Never, Ever....paint yourslef into a corner.
More to follow..........
An "Intellectual Trap" defined: Trader's by definition fall into the group of highly competetive individuals who consider themselves (right or wrong) extremely intelligent. An "Intellectual Trap" develops when the trader thinks him/her-self far superior than the market. They just "know" that they are right and everyone else is wrong. They can't believe how dumb the market is! They get angry when their trade is losing. Wrong way Charlie! An excellent trader knows that it is not how smart they are; it is the ability to read when the crowd will see what they see. They may be spot on; however, being early can kill your capital. This is why trading the markets has caused many very smart traders everything. It drove them mad. The "Trap" comes when you are so convinced that you are right and your theory is so brilliant that you are subconciously willing to go down with the ship (and so does your capital)!
The Rules:
1. Never go down with the ship! Who cares if you were wrong. The goal is not to be the smartest person in the room; the goal is to make the most money. Socrates said: All that I know, is that I know nothing. A smart man. Surrender the ego.
2. Always use stop losses. These protecd you from yourself.
3. Just when you think you have it all figured out is when you are the most vulnerable.
4. Never, Ever....paint yourslef into a corner.
More to follow..........
TVIX trade update....The Great Escape!
Wow....although we haven't had time to post, our clients know the incredible drama we went through....here is the update:
TVIX and volatility in general continued to defy all logic. We talked about "The Fix is In" and "The Facebook IPO" in regards to "painting the tape". TVIX continued to trade down and the market continued in a straight up trajectory. Our losses continued to mount. It was very difficult to hold. Well....TVIX broke 14 and we had to decide to bail with a huge loss or double up on the entire bet. It just didn't make sense. We thought long and hard and decided to double-up the bet again at 14. So, now we are sitting "All in" with the entire financial media against us. The market is going to the moon. Volatility is an exstinct animal an we are loaded to the gills with Volatility!
Scary stuff to say the least. The technicals confirmed a potential bottom and one of our readers- "Schmitty" sent us texts saying it looks like TVIX had bottomed. We thought he was on to something. We made the bet.
The next 3 days TVIX went from 13.86 to 21! We bailed at 20 and took a small profit. We escaped!
TVIX and volatility in general continued to defy all logic. We talked about "The Fix is In" and "The Facebook IPO" in regards to "painting the tape". TVIX continued to trade down and the market continued in a straight up trajectory. Our losses continued to mount. It was very difficult to hold. Well....TVIX broke 14 and we had to decide to bail with a huge loss or double up on the entire bet. It just didn't make sense. We thought long and hard and decided to double-up the bet again at 14. So, now we are sitting "All in" with the entire financial media against us. The market is going to the moon. Volatility is an exstinct animal an we are loaded to the gills with Volatility!
Scary stuff to say the least. The technicals confirmed a potential bottom and one of our readers- "Schmitty" sent us texts saying it looks like TVIX had bottomed. We thought he was on to something. We made the bet.
The next 3 days TVIX went from 13.86 to 21! We bailed at 20 and took a small profit. We escaped!
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