Class is in

Step into my classroom, will you? Let's take a quick foray into a typical traders analytical arsenal. Any trader will tell you that the trend is your friend. I agree, but what do traders most commonly track trends with? Lines. I'm talkin' slope and intercept, y=mx+b, lines.

To this day, the most commonly used analytical tool to track trends on a chart is by far a line. Lines are drawn for support, resistance, from highs to highs, and from lows to lows.

What if we started using slightly more complex functions to track trends? The exponential function is a clear front runner here due to it's natural ability to track growth and decay. We can even add noise using trigonometric functions such as sine and cosine.

I think a little bit of, relatively simple, mathematics still has the potential to go a long way in the stock market. You'll find out based on whether I wind up in a penthouse or in rehab. Or both.

"Make things as simple as possible, but not any simpler." - Albert Einstein

Trades

Who needs 'em anyway right? Not me.

They say to be a successful trader there are 3 things to worry about:

1. Trades (25%)
2. Psychology (35%)
3. Money Management (50%)

Those percentages are rough weighting one trader put on the relative importance of the element. Something to think about.

Update

Natural gas isn't doing anything I want it to lately and I'm keeping. I only learn through failure, too stubborn to do it any other way.

The USD is putting up a nice fight above par compared to CAD but it looks artificial. The only question I have left is about the timing of shorting the USD.

Might become a financial consultant. Ah jeez.

I don't sling rocks
I buy stocks

Change Up

I'm starting to think about adapting a new investment strategy. I think this whole value investing thing is best suited to someone with more money, more experience, and more time. Hopefully one day I'll be in the position, however the reality is that day isn't today and won't be tomorrow for some time.

I am going to start looking at companies hitting new highs, coming out with new products, and trading at over 20x PEs. My jewish personality might go into cardiac arrest when I make a purchase but my irish gambling side will enjoy the rush.

Now however I will have to follow some rules because this style can be more risky. Cutting my losses at the typical 7-8%, no exceptions, should keep me safe.

A change in style is first a change in thought. I'm cool with that as long as I leave a passage back.

No Time

I just forget about this blog sometimes therefore it will never be successful. I'm not gonna lose any sleep over it. I treat it like more of a journal anyway.

Natural Gas worked out if I had stuck to my double down strategy I would have made a +50% return. I had some uncontrollable cashflow issues that got in the way, so I'm just looking at a small gain somewhere around 5%.

I've got some information on a small cap company I think might be worth a 50% return over the next month. I've entered the position, time to sit on it.

Ain't no rest for the wicked..

If everything bad was wrong, I'd never be right.

- WDS