March 3, 2014 - MDT - MHFT vs MDT

While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to six-month time frame, Mad Day Trader, provided by Jim Parker, will exploit money-making opportunities over a brief ten minute to three day window. It is ideally suited for day traders, but can also be used by long-term investors to improve market timing for entry and exit points.

This is in response to questions from our mutual clients.

John and I have two separate, distinct and effective trading styles. Together, you as a client get the benefit of 80+ years of experience.

John's style affords him the luxury of not being exact to the tick and the minute with timing.

He has a macro view of how the board will set up and is looking to place a bet for a directional move and/or to collect time decay.

One of the key elements in his style is internally asking the question... "where is the market not going to go over a defined time period," thus allowing the time decay inherent in options to work in his favor.

John knows his audience and understands that his clients need time to get the Alerts and have them executed.

John and I speak extensively about every possible market scenario.

We discussed his last Spy trade in depth.

We endeavor to deploy the lowest risk scenarios.

While I was looking at the short term flow being up into month end, I also wanted to see a Nasd 100 print of 3754 (Friday's high was 3723) for an interim high.

John, being macro man, was looking farther out.

John saw this as an opportunity to get into a Bearish trade with the capital flow up for at least another 1-2 days.

The Spy Alert went out Thurday.

I've had the 3754 NASDAQ level on my matrix since 1999. The shortfall was a rounding error on a 15 yr. move.

It doesn't mean we won't see that print at some point, it's just not now.

We were both looking for some back and fill this week in the Indices.

He was expecting the rally in the Equity Indices to stall, allowing him to collect the premium on the trade.

I bought more Bonds Friday after seeing the breakdown in the High beta Nasdaq names for a Risk Off scenario.

Yes, you should do his trades when he sends them!

If you're not at the screen or in meetings and miss a trade to outright Buy or Sell "Puts or Calls", as in the Natgas, you should be patient and ask if you've "totally blown the entry."

There is always another trade.

Questioning whether I like the trade is akin to asking me whether I want to date a Blond or a Brunette. They're two different disciplines that work.

You're best served doing the trades when they come out, rather than taking the time to puzzle out our thought process, which generally comes in a follow up.

 

January, 2014 MediumTerm Outlook-1st-qtr-2014/

For Glossary of terms and abbreviations click here.