• support@madhedgefundtrader.com
  • Member Login
Mad Hedge Fund Trader
  • Home
  • About
  • Store
  • Luncheons
  • Testimonials
  • Contact Us
  • Click to open the search input field Click to open the search input field Search
  • Menu Menu

Trading Devoid of the Thought Process

Diary, Newsletter
Trading Devoid of the Thought Process

With every major index rolling around like a BB in a boxcar (SPY), (QQQ), (IWM), the day to day call has become almost impossible.

The Mad Hedge Market Timing Index is now showing “Extreme Fear” with a reading of 20, never a good time to initiate a new short.

What’s a trader to do here?

Invest purely on the basis of momentum?

That risks buying the top tick in the entire move and looking like a complete mug to your clients, your boss, your coworkers, and your wife.

Maybe it’s time to take a long cruise at let your performance flat line at an all-time high?

But then, mid-March is a little early to call it a year, even though you may be up double digits.

The exit of institutional money to trading in in-house dark pools, the concentration of trading into single sector exchange traded funds (ETF’s), and the departure of the traditional individual investor, are all exaggerating these moves.

It doesn’t help that stock markets are sitting just short of all-time highs.

You could run off and trade something else besides stocks. That’s easier said than done, as virtually all other asset classes have become untradeable.

Bonds (TLT) have just entered a new 30-year bear market.

Some commodities (COPX) are now trading at double their fall lows.

Precious metals (GLD), (SLV) seem to be hesitating here.

What’s a poor trader to do?

Take up the action in collectable Beanie Babies? Rare French postage stamps? Crypto-currencies? Rare vintage Madeira’s?

There are only two ways to deal with a market like this. Turn off the TV, cancel your newswire feeds, quit reading research, and just look at your screens.

Buy the low numbers and sell the high ones.

It is no more complicated than that.

Don’t confuse matters with the thought process. The markets are now so illogical you will only muddy the waters. A brilliant move in one hour may look like a disaster in the next.

The other method is to become boring. Just find the cheapest, low fee index fund you can find, like one of Vanguard’s, buy it, and stuff it under your mattress.

I’m pretty confident that it will be up 10% by the end of the year.

That means you will probably beat most hedge managers out there, as you would have done for the past nine consecutive years.

Try to earn more than 10% trading in these choppy markets, and you could end up losing 10%, or 100%.

As for me, I am going to stick with trading. At least I’ll be there when it turns easy again, which has to be soon, and I’ll make a hell of a lot more than 10%.

And was never very good at the “boring” thing.
 


 


 

Share this entry
  • Share on Facebook
  • Share on X
  • Share on WhatsApp
  • Share on Pinterest
  • Share on LinkedIn
  • Share by Mail
https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 Arthur Henry https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Arthur Henry2018-03-09 01:06:182018-03-09 01:06:18Trading Devoid of the Thought Process

tastytrade, Inc. (“tastytrade”) has entered into a Marketing Agreement with Mad Hedge Fund Trader (“Marketing Agent”) whereby tastytrade pays compensation to Marketing Agent to recommend tastytrade’s brokerage services. The existence of this Marketing Agreement should not be deemed as an endorsement or recommendation of Marketing Agent by tastytrade and/or any of its affiliated companies. Neither tastytrade nor any of its affiliated companies is responsible for the privacy practices of Marketing Agent or this website. tastytrade does not warrant the accuracy or content of the products or services offered by Marketing Agent or this website. Marketing Agent is independent and is not an affiliate of tastytrade. 

Legal Disclaimer

There is a very high degree of risk involved in trading. Past results are not indicative of future returns. MadHedgeFundTrader.com and all individuals affiliated with this site assume no responsibilities for your trading and investment results. The indicators, strategies, columns, articles and all other features are for educational purposes only and should not be construed as investment advice. Information for futures trading observations are obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. Your use of the trading observations is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness of the information. You must assess the risk of any trade with your broker and make your own independent decisions regarding any securities mentioned herein. Affiliates of MadHedgeFundTrader.com may have a position or effect transactions in the securities described herein (or options thereon) and/or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies.

Copyright © 2025. Mad Hedge Fund Trader. All Rights Reserved. support@madhedgefundtrader.com
  • Privacy Policy
  • Disclaimer
  • FAQ
Link to: March 8, 2018 - MDT Pro Tips A.M. Link to: March 8, 2018 - MDT Pro Tips A.M. March 8, 2018 - MDT Pro Tips A.M. Link to: March 9, 2018 Link to: March 9, 2018 March 9, 2018
Scroll to top