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Friday, March 29, 2024

Down and Dirty Buy List! (Members Only)

I got a little distracted this morning laying out some hedging strategies and rounding out our top 10 picks list so this is going to be just a very quick cut and pasting of what we picked up last week

Scale, SCale, SCAle, SCALe, SCALE into entries!  As I said in this morning's first Alert, we are still not back to the bottom of our levels so we have no interest in making big commitments until we start seeing some green above the bottom of our trading range.  My comment on scaling into short-term positions (and please read the whole article and all commentary in the Strategy Section) in yesterday's member chat was:

If you are not scaling in or are done scaling into a position you NEVER want to lose more than 20% of a full position (which should never be more than 10% of your virtual portfolio, limiting your max possible loss to 2% of your portflio on any single position).  So I I buy the USO $32 calls for $1.05 naked and I was going to toss $5,000 at it then I would buy 1/4 for $1,250 (10 contracts) and if it drops about 20% to .85 I would consider either a DD or quittiing and taking a $200 loss on a bad trade.  If I do decide to DD, I will, of course, try to catch .75 or wherever it stops. 

Frankly, if I wanted to DD at .85 and it pops back to .95 then why would I chase it, it’s still down 10%?  Anyway, so let’s say I hit my DD at .75 so now I have 20 contracts at avg .90 with the current value at .75.   If they fall 20% further than that, I am less likely to DD there than roll to a lower strike (assuming I was going to stick it out).  

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