I hope you remember me. We once met at a luncheon in Paris a number of summers ago.
Thank you for the suggestion you made during the January 31 webinar about the launch of the Mad Hedge Technology Letter. After the first issue, I bought Micron Technology (MU).
I bought two July $39 Calls for $7.80 and two January 2019 $37 Calls for $11.40. On February 26, I sold one of the July calls for $11.00 (+40.7%) and today the second for $15.70 (+100.0%) for a total profit of $1,105.51.
I still have an unrealized profit of $1,718 on the January 2019 calls. So, if I sell those now I will have earned $2000 with this trade.
We once met at a very scarcely attended luncheon in Paris a number of summers ago.
John Thomas reply: Good work Dirk! Let’s meet in Paris again for lunch this July.
I was pondering the latest Trade Alert from MHFT today when my cell rang with a Berkeley, CA area code. Since I know a couple people in that part of the world, I answered, and it was none other than John Thomas.
Had I not heard his voice on the MHFT webinars, I would have thought I was being conned. But given that I’m in the last month of a trial run, he actually called to find out how I was doing with the service and what I thought.
Here’s the short version of what I told him.
I’m a pretty experienced investor, but definitely not sophisticated when it comes to using options, or for that matter, trading currencies and commodities.
My first trade with MHFT – a (FXY) vertical call spread – literally scared the hell out of me, so I used a tiny position size. I think I made around $900 ($400 more than my trial subscription, so there’s that).
But through the process of using John’s trade ideas, I learned. Fast. Nothing will help you grasp the potential of option strategies like doing them. And as I write this, I have multiple positions on courtesy of MHFT that are on track to deliver double-digit percentage gains in a matter of weeks!
I can’t quite comprehend how he knows so many well-placed people, but he’s incredibly adept at grabbing insights from them, turning these into an investment thesis, and making it incredibly clear and actionable to this reader base.
One day he’s writing about a chat with a three-star general and the next you’re buying a call spread on Palo Alto Networks (PANW). He connects the dots in a ridiculously useful way.
But it’s more than just the idea, it’s the timing of the idea. The world is full of people who can say “hey, cyber-security is a big deal.” Or, “wow, the euro is getting killed.” But the actual trade execution to profit from that in the near term? He’s freaky good.
I also love the defined exit strategy. Look, if you’re the most disciplined human on the planet and never let a bad trade turn into a long term “investment,” more power to you.
I am not. I hate when I do it, but it’s happened more than once. With MHFT, the exit is well marked. You can’t miss it. Personally, I find that it removes significant stress, not to mention risk.
Today, I was over at my local Schwab office – before John called – and was raving about MHFT. Not stark raving. Good raving. I’d be surprised if they aren’t signing up for a trial as I write this.
John, thanks for the call. That was a really nice surprise.
But more importantly, thanks for great work, thinking, and ideas. Enjoy your travels and I look forward to meeting you at one of your conferences.
https://www.madhedgefundtrader.com/wp-content/uploads/2014/08/John-Thomas-Beach-e1416856744606.png400276scruglesshttps://www.madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.pngscrugless2019-05-16 01:03:152019-05-15 17:30:06The Best Testimonial Ever
Your article on “The Ten Baggers on Solar Energy” is the best, well informed, educated piece of literature I have read for a long time.
Thank you for your honest and well-informed article. I am going to be 86 years YOUNG in coming November and appreciate a simple jewel in this money chasing jungle.
I would like to follow you and learn more new stuff in this fast going and changing world. Thank you.
Lisa Ontario, Canada
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I watched John Thomas for a year before jumping in, and I should have done it earlier when he phenomenally traded that awful year, 2011, that whipsawed so many investors including myself.
He again outperformed the market in 2012, 2013, 2014, and so far he has shown amazing skill once more in navigating treacherous markets with deep-in-the-money call and put spreads.
You can not exactly replicate his numbers 100% of the time for many different reasons, some of them strictly technical in nature. But you will get most of them, or you use his trade alerts just directionally to help you determine where you should put your money and how to allocate your dollars risk on vs. risk off.
I am up 20% a year trading with John since October 2014. I also like John's in-depth charts, market insights, and his educational webinars that have become the cornerstone of my market evaluations.
One should never put all eggs in the same basket but subscribing to the Mad Hedge Fund Trader is a smart way to enhance the performance of your stock portfolio.
Christian Austin, Texas
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I wanted to thank you for a trade idea you inspired me to take based on your BA commentary and your trading methodology. I placed a 22 March $340-$350 Vertical Bull Call spread on BA yesterday. Unless there is some catastrophic news in the next week, I should make $1570.
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I have been in the money management business for 35 years and really enjoy your service.
I just want to say that the way you handled the start of the year which was a combination of exploiting opportunities from an oversold market combined with your overall risk mitigation strategies was not only brilliant but profitable as well.
I am up on the year and glad to have not participated in the insanity of a market short-term meltdown.
Moreover, one of the reasons I like your service so much is I am prohibited from making specific stock buys/sells without permission from our trading desk in NY and that can take time as well as prohibitions within days of earnings announcements or if the firm is buying/selling.
So using market indices through ETFs is not only helpful and productive, but outright brilliant.
So a million thanks again!
Bill Cleveland, Ohio
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I cannot give higher marks to John's style of approaching the market. My wife has learned so much from him that we are actually having conversations about the global economy. Wow! You will learn money management, the concept of risk versus reward, and how to take advantage of trades that are worth taking.
I’m sitting here at my Lake Tahoe lakefront mansion watching the snow come down heavy and the Dow Average meander around and go nowhere.
It is one of those perfect, picture postcard days with all white except the choppy cobalt blue lake. The fields outside are covered with snow crystals sparkling.
After the close, I’m going to have to shovel off my outside decks to keep the weight of the ice from collapsing them.
Those (TLT) puts are looking pretty good this morning, and are approaching the maximum profit point with only a few weeks to expiration.
In these tedious trading conditions, it is more important for me to teach you how to avoid doing the wrong thing than pursuing the right thing.
I am therefore going to fill you in on my 13 Rules for Trading in 2019. Tape them to the top of your computer monitor, commit them to memory, and maintain iron discipline.
They will save your wealth, if not your health. Here they are:
1) Dump all hubris, pretentions, and stubbornness. It will only cost you money.
2) The market is always right, even if all the prices appear wrong.
3) Only buy the puke outs and sell the euphoria. Do anything in the middle, and you will get whipsawed.
4) With option implied volatilities so low, outright calls and puts are offering a far better risk/reward right now than vertical bull and bear vertical call and put spreads. It is also better to buy stocks and ETFs outright with a tight stop loss. This won’t last forever.
5) If you do trade spreads, you can no longer run them into expiration then collect the last few pennies. If you have a nice profit, take it. Don’t hang on to the last 30 basis points even if it means paying more commission. The world could end three times, and then recover three times before the monthly expiration date rolls around.
6) Tighten up your stop loss limits. Not losing money is the key to winning in this market. There is nothing worse than having to dig yourself out of a hole. Don’t run hemorrhaging losses, like the (VXX) from $55 down to $25. It will get easy again someday.
7) Buy every foreign crisis and sell every recovery. It really makes no difference to assets here in the US.
8) Several asset classes are becoming untradeable for long periods (retail, the ags). Stay away and stick to the asset classes that are working (gold and short bonds). This is not the time to get greedy and bet the ranch.
10) Turn off the TV and just look at your screens and data. Public entertainers on the tube have no idea what the market is going to do, especially if their last job was sports reporting. Their job is to get you to watch the ads for General Motors and TD Ameritrade.
11) As the bull market in stocks enters its ninth year, too many traders, analysts, and strategists have become complacent. You are going to have to work for your crust of bread this year. This is earnings, technology, and cash flow-driven bull, not a QE or tax cut-driven one.
12) It is clear that more money was allocated to high-frequency traders this year. That is driving the new, breakneck volatility, increasing stop outs.
13) Ignore Washington at all costs. The market doesn’t give a fig what’s going on there, to quote The Queen.
The hackers are getting better. Better change your password from 12345 to DKFGGIDKFOKBJGELXPEVJBKDLKFBBJFCJCKVLBKGTY69!, and hope that the 69 doesn’t give you away.
Only The Real Gunslingers are Prospering in This Market
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I hope you have great plans for the weekend. I am absolutely loving your trades. They have paid for my membership. I wish I was able to catch them all.
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