So far, in the first two weeks (through the 9th), we had 94 Trade Ideas for our Members and all but 11 (88%) were winners (see Part 1 and Part 2). Of course we use hedges, where we purposely bet the opposite direction in order to protect ourselves so it's not possible to be 100% and even 88% is strange – usually we're aiming for around 66%.
The trick isn't to be right ALL the time, but to control your losses so they don't counteract the gains. Usually, we go for trades that have a good chance of paying 200% or more within 18 months so we EXPECT to make 10% a month or more. When those work, we get huge wins – if we then keep our losses to 20% (of our allocation) or less – the statistics take care of themselves as +20%, -20%, +60%, -20%, 0% on 5 trades (for example) gives you 5 allocations that made an average of 8%.
By scaling into positions (something else we practice with our Members in our Long-Term Portfolios), even if we lose 100% of our initial position – it's generally only about 20% of an allocation. Since we can't lose more than 20% of an allocation and we usually try to make 200% or more on the cash we lay out for our long-term trades (which nets 40% or more for a winning allocation) – again, math does its work over time.
That being said, let's have a look at how week 3 went in May:
While investors may not have learned anything from the last crash, the Banksters have learned that you can manipulate just a few key,
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This entry was posted on Saturday, June 14th, 2014 at 8:28 am and is filed under Uncategorized. You can leave a response, or trackback from your own site.
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