The Anatomy of a Profitable Process
Affecting positive change through financial understanding.
While we create branded content from the ABC’s to the 401(k)’s, the nuts and guts trading stuff has always been our wheelhouse. As we don’t “do” advice in the ‘Ville—that would be impossible without knowing particular time horizons and risk profiles—we share what we’re doing, how we’re doing it and, most importantly, how and why we do it.
With hopes that sharing our process adds value to yours, the following stream of consciousness is the anatomy of my recent trading try:
The seeds were sown Tuesday, when I initiated risk in select financials.
While my initial instinct was to stop out my exposure into the “bank crash,” I called an audible and carried my risk home overnight.
With the benefit of overnight reflection, the “mirror image” of our previous scrimmage (at all-time highs) began to crystallize.
As the market probed lower yesterday, I increased the size of my bets and the vehicles used.
Into the melt up a few hours later, I pared some risk as a function of discipline. That Buzz, posted in real-time yesterday, looked a little something like this:
King Jumps Queen. Rook Jumps Queen...
1/21/2009 3:28 PM
It's nuttier than Austin Powers' coffee out there! A bank crash Tuesday, a reverse bank crash Wednesday, a sale at Penny's... I mean, Jeezums, are we having fun yet? Some thoughts, as quickly as I can scribe 'em:
Remember way back on January 7 when I scribed my ten themes for 2009? Nestled in there was the following vibe:
The January 20th transfer of power is an important inflection point, for if we can collectively navigate past that date without geopolitical conflict, stocks have room to run into March or April, when the bloom begins to fade on the new administration’s rose.
I'm not smart enough to know if we’ve seen the beginning of that trade but it's worthy of a mention given the price action and, perhaps more importantly, the timing of the price action.
I've still got my Citigroup (C) but, while only a three-dollar stock, 30% in a single session begs some sales (yes, discipline Gods, I hear you).
Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at firstname.lastname@example.org.
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