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
https://www.madhedgefundtrader.com/wp-content/uploads/2017/11/john-gun-west.jpg273278Mad Hedge Fund Traderhttps://www.madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.pngMad Hedge Fund Trader2019-02-27 01:06:422019-07-09 04:06:42The 13 New Trading Rules for 2019
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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Hey John and the MAD Team, here’s a late Happy New Years!
You really nailed and keep nailing great reversals and trends that are just beginning to deserve a watchful eye.
I’m still a bit stuck on futures, but I realize the safety in your spreads is a lot smarter…Thx for all you know and for all you do.
Rod Alberta, Canada
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Thanks to both of you for taking the time to answer me back. I am going to hang in there.
I like your newsletter because the unbiased perspectives you share and the way in which you look at market opportunities in a realistic, factual manner. I am just hoping to turn that advantage into profit and learn.
I don’t like financial advisors as they open your account, offer canned advice, and disappear after they take your money. I want to have the independent skills needed to manage my own wealth, as I grow old.
I don’t expect that to happen overnight or without advice, but I am hoping that your newsletter is something above par not just in appearance, but in results.
Time will tell.
Thank you again for returning my emails. That says a lot.
Best, Ryan Hammond, New York
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I used your Apple (AAPL) vertical bull call spread idea, but went in a day later at and got out today for a gain of $720 on 12 contracts.
One day makes a big difference, of course! When AAPL took the big hit, I jumped on your idea.
I am a new member, but now have paid for my membership in full! Can’t complain.
I also took small gains today on the Salesforce (CRM) position of $1,020. With the market so volatile, I am OK with taking the small gains. They may disappear the next day.
Kent Chandler, AZ
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Thank John for his ceaseless banter. I enjoy this service so much. Great stories!!!!
I hope our paths cross soon.
Bill North Carolina
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The small cost of this newsletter pays for itself a thousand times over. My returns mimic those of your portfolio for the year and for that I am grateful.
The only suggestion I would offer is to keep doing what you are doing. It is people like you that will help return the once storied name to Wall Street.
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I can’t tell you how much I enjoy your blog. It is the first place I go every morning and I miss you on the weekends.
I stumbled upon your site about 4 months ago and have been addicted to it since day one. I really appreciate not only your insight into the markets but also your global and historical perspectives.
All of this served up with your great sense of humor makes it a must read! Thanks for all your hard work.
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