Saturday, August 13, 2011


1. This is the new mantra. HIGH PROBABILITY TRADES ONLY. Nothing else is worth the time or life because others trades just wipe off the profits of the high probability trades. That's what they do and at the end all you gain is nothing and a whole lot of waste of time and money and profits and also getting into losses. This is the story of many many times. Nothing will improve unless I take this stand of only trading high probability trades.

 From my experience in day trading, this is what I realized. One has to do only HIGH PROBABILITY TRADES one a week and keeping the 1 year 30 day moving average graph into perspective. This graph is the only graph that give the over all picture of how the stock has been behaving over one year. Obviously if one can see a pattern repeating one can take advantage of it.

2. If the stock graph does not fit the conventional but moves like commodity, that is moves in one direction extremely and does make a repetitive pattern, these are the graph to avoid. I got loss on shorting SINA, which moves like commodities.

3. Again day trading is not a HIGH probability, it is low probability and most unpredictable. Experimenting with too much money wiped off all the gains from previous months. I should not have put too much money into low probability trades and time consuming and ill studied systems.

4. So the best way to is only trade the high probability trades from KNOWN graph patterns that repeat themselves and I have studied them intensely over the years. Just make money on them using OPTIONS with low capital input for now, since the markets are bad. Even if there is a small rally going on one can still buy calls on stocks that are moving above 30 day moving average in a bullish macroeconomic scenario which is not evident in conditions now.

There might be small rallies but nothing consistent with the economic problems we have. So just buy some puts when the stock moves to the 30 day moving average in bulling and down trend markets.

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