Bull or Bust

a bull's view

A TRADERS NOVEMBER TO REMEMBER

How to make $50,000 in a single month and, for a brief moment, be part of the Elite

Trader requirements – Top Ten List

  1. Never sleep – seriously no time for that. I’m getting about 2-3 hours a night at the most.
  2. Glue your eyes to four monitors around the clock – crude trades 24 hours a day!
  3. Read EVERYTHING including every Reuters news release in real time
  4. Learn to have NO EMOTION, go with your gut and actually follow the masses (strange right)!
  5. Debate bankruptcy A LOT
  6. Make terrible mistakes and question your intelligence constantly
  7. Second guess yourself constantly
  8. Must have an extremely supportive and understanding significant other
  9. Must have brass ones…by far the most important characteristic and think McFly! Think!
  10. Must believe in yourself above and beyond everything and everyone else and read between the lines.

But in the end, remain persistent and enjoy the hell out of it!!

THE WRAP UP

After years of trading I did today the one thing I’ve never done: I cashed out this afternoon going 90% into cash and keeping my Home Depot and Nvidia options for May and March respectively.

For the first time ever I’m up and I’m out. I’ve been up many times, but never out. I’m always moving into something else and looking for the next trade. However, I need a mental break after the month of November for sure. Time to relax and enjoy the holidays…up for the year!!

Had I cashed out yesterday (ugh) instead of today, I would be up over 14% for the year instead of only 1.46% yeah lost 13k today as the Friday selloff occurred (that’s normal and I predicted it). I won’t even go into how much I would be up had I not bought insurance and truly stuck to my guns.

THE MISSED OPPORTUNITIES

If my calculations are correct – I left over $40,000 on the table this WEEK alone (yes, I almost made 100k in a month) by protecting my trades during the big OPEC meeting Wednesday and executing some stupid mistakes while trying to figure out how to handle such a large gain (uncharted stock territory and give me a break).

Briefly, I am an OPTIONS trader, not a STOCK trader by nature. Sure, I have stocks in other portfolios, but that’s not what this is about. I have profited $42,000 in a single day with options (yes, I have also lost $38,000 in a single day), but never with stock. With options you know you have to sell them because the value decays with time. There is no thought to that, but it became very clear very quickly that having stock gains is much different mentally. I made mistakes and missteps because I wasn’t used to this scenario. Told you I was honest…I blew it, but I covered my ass and that was important.

TRADING FACTS

Most important trading lesson for anyone thinking about getting into this? It’s extremely simple, but completely opposite of human nature and I believe it is why so many lose their ass: buy when it’s going down and sell when it’s going up. It’s literally that simple.

So many rookies (hey, we all did it) jump in when whatever is going up, but by then it’s too late. It’s a greed trap. Look for beaten down stocks that have good balance sheets, little debt and are making money (EPS). Companies that have been beaten down for no fundamental reason such as Nvidia [stock_quote symbol=nvda].

Believe in them and give yourself enough time. They will eventually come back. I did this with Denbury (of course), but Amazon, Kroger, Pandora, Freeport-McMoRan, Nvidia, AKS Steel, CSX (railroad) and many others all during the month of November with excellent profits – CSX (45%), Amazon (63%), Kroger (102.67%), Denbury (70% stock, 108.39% options), Home Depot (27%)…

If you think making a 100% return in the market is bullshit…think again. That’s all folks…

MERRY CHRISTMAS!! I’M DONE FOR THE YEAR!!

Stock and Option Trading