SCT Issue #249
Yesterday, you should have easily purchased shares in VelocityShares 3X Long Gold ETN, symbol UGLD, at roughly the $8.97 level. Hold and maintain a good-till-cancelled protective sell stop at $8.22.
If you have not bought UGLD, for whatever reason, you may still do so today. Buy no more than 100 shares for every $25,000 you are trading. Purchase your shares at the market and use the aforementioned protective sell stop.
Gold is basing for another move higher, as explained yesterday. Meanwhile, the stock market is struggling now, after three days of violent action toward the upside.
Unfortunately, yesterday you should have been stopped out of your shares in SPXS, when it hit my recommended sell stop at $20.39.
Based on the original recommendation (April 28 at $18.39), you should have bagged a gross profit, before broker commissions, of roughly 10.8 percent. New members, or those of you who acted on the recommendation more recently, may have experienced a modest loss.
No worries. Not every trade will be a winner, and I would like to use this opportunity to point out a few things:
First, the sooner you act on my recommendations, the better.
Second, do not try to out-guess or second guess my models. They are not perfect. No one is nor is any model or trading system. There will always be the occasional losers.
That said, you will be hard pressed to outperform the recommendations I give you.
Third, don’t engage in “could have, would have, or should haves.” Sure, it would have been perfect if you had cashed out of DXD and SPXS this past Monday when you grabbed profits on UVXY.
But that’s hindsight. On Monday, the models and money management techniques I use said to grab profits on the riskiest position – UVXY – and to tighten up the stops on DXD and SPXS. That is precisely what I recommended.
The stop on SPXS did not hold, and you got stopped out. We may also see DXD get stopped out today or Monday. If so, no problem. The net on all three trades would still be a pretty darn huge profit.
That brings me to …
Fourth, you should not expect every trade to be a winner. If you do, you’re setting yourself up for failure. Of course, the greater the percentage of winning trades, the better. But the percentage of winning trades one has is not the key to success.
The key to success is money management. Keep your losses small and let your profits run. Just like we are doing.
That way, you can even have more losers than winners and still have a net profit. And when you do get the winning streaks where for a very short period of time you win on every one of a slew of trades, you make a killing.
On the flip side, when you do get periods where you have a slew of losers – and that will happen – by managing your risk tightly, you still come out a winner.
In fact, some of the most successful, richest traders I know of aren’t right more than roughly 60 percent of the time, yet they make millions, year in and year out.
How? By focusing on money management and by having the right “psychology” for trading, which is what I am discussing with you today.
Speaking of trading psychology …
Fifth, never fret over losses or missed opportunities. If I sound like I’m being tough, then so be it. But I learned a long time ago that to be a successful speculator, follow your rules or your system and live in the present – not the past, nor the future.
That’s what makes the Michael Jordan’s of the world, the Roger Federer’s or the George Soros’s or Warren Buffett’s. Living in the present, not the past nor the future.
Hold all open positions – DXD, UNG and UGLD – and their related protective sell stops and stay tuned.
Best wishes,
Larry
Position Tracker
Click here, or on the image below, to view our position tracker in .pdf format.
