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| User Info | Money Management: The Key To Survival in forum [Ticker] | |||
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Genesis Posts: 71435 Incept: 2007-06-26 
KD^2 
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http://market-ticker.org/archives/1293-M....
---------- "The monetary base in ALL modern monetary systems is the sum of unencumbered assets against which one is both WILLING AND ABLE to borrow." - Me
2009-08-04 18:08:36
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Donethat Posts: 70 Incept: 2009-04-22
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Do not depend on being able to trade non speculative capital via internet or telephone. They have crashed in the past, and will probably do so again.
2009-08-04 18:15:07
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Mondocondo Posts: 3143 Incept: 2007-12-03 
Miami
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Excellent advice. Do you think it is a decent speculation (with your speculative account) to buy long-dated index puts at this point?
2009-08-04 18:15:37
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Bigcat Posts: 1523 Incept: 2008-09-10 
Nice, France
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well done, much needed.
---------- "When the goal shifts to simple survival for the Fed their goals will change drastically and their strategy will adjust accordingly...Like Congress, the Fed will throw its "allies" under the bus when they become a political liability. Look at Mozillo now! " Sushihorn, 07/09
2009-08-04 18:17:45
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Jcwaliski Posts: 1897 Incept: 2008-10-01
Chief Douchebag
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Donethat - I totally agree. I got wind of the short ban last year, but decided to hold some WFC short anyway. I ended up buying lots of ICE (in the 60's) in the same account just in case we saw a squeeze. Well, squeeze it did. If my broker's website hadn't crashed, I could have gotten out in the $105-115 range at the open. Instead, I settled for $85.  . At the extremes, don't count on anything going right with technology.
---------- Ultimately, we are all seeking the truth--to expose it, lay it bare, own it as our own. My take on this place is simply that there will be NO COMPROMISE in exposing what IS. - Truthseeker
2009-08-04 18:49:44
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Nemesis Posts: 4502 Incept: 2008-01-03
Canada
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So that actually happened to Solomon from xtrends?
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2009-08-04 19:23:26 by nemesis
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Hihoherewego Posts: 595 Incept: 2009-02-25
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Denninger I think you might want to add one very important tenet to follow in trading which is..... "The Market Can Stay Irrational Longer Than You Can Stay Solvent" This is a bull market. Granted an irrational bull market but it is nevertheless still a bull market. As I had said in a post a long while back the market is driven foremost by politics and secondarily by a myriad of other forces. The 2010 elections are looming. What party is in the White House? What benefactors that helped elect this current administration will drive this bull market to continue so that this administration will continue to benefit them further? Deduce whatever you will from that but from there you or anyone else that understands the political dynamics behind market trends could've seen why the market is the way it is today - and it is why I am long until those elections are over. From that point onward I will say that being short may again become very profitable indeed. Until then don't play matador unless you like getting gored. This is my take and I am willing to accept the fact that I may be wrong just like everybody else is sooner or later which is where your money management logic and approach is superb. ................ "No matter what don't blame anyone but yourself. Luck has a lot to do with how things turn out in life, but we ultimately are all in the same boat of chance and nonetheless because of it you may still just be one unlucky son of a b**ch under the immutable fact that whatever befalls you it was your fault to endure it for being born in the first place." Quote from one hard ass of a self-defense teacher I once knew.
2009-08-04 19:29:06
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Phirang Posts: 8824 Incept: 2008-10-25
bar khoba's revenge
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Politics are subordinated to the monied interests. The monied interests are monetarists: the hard-nosed deflationist bankers of yore are GONE - that's SOOOO 1930's. THAT'S why you stay long. **** the elections: this is about blood, iron, and food. ---------- The Treasury can issue debt on your behalf because the State can and will stomp the wealth out of you and your family.
2009-08-04 19:32:12
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Nemesis Posts: 4502 Incept: 2008-01-03
Canada
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Quote:The 2010 elections are looming. Is that the extent of your investment thesis?
2009-08-04 19:33:22
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Quasi Posts: 325 Incept: 2007-08-28
Ohio
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I don't know what's worse, losing $4M on a trade, or borrowing another couple mil from a friend to press your bets. I don't even know the guy, but I hope it works out for him.
2009-08-04 19:39:24
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Punch_rockgroin Posts: 446 Incept: 2008-12-31
Pacific NW USA
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Great info. I finally closed my disastrous positions yesterday. I was trading with my IRA, and wanted to play the bear side, so I was in ultrashorts . I managed to erase 11 months of gains in a little over 6 weeks before I finally admitted defeat. Hopefully, this is as close as I ever come to blowing up an account.
---------- Put the boots to him. Medium style.
2009-08-04 19:43:57
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Fred_flintstone Posts: 5130 Incept: 2008-04-15
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Great ticker KD, and very sobering story. Let's all not do that.
2009-08-04 19:45:59
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Throxxofvron Posts: 2672 Incept: 2009-02-17
The Land of Bilk & Money
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The granting of Wisdom is the epitome of generosity. Sage advice becomes public service. Many Thanks, Karl. Phirang: I agree; -that's about the extent of it. ---------- DIONYSUS: " Thou hast no knowledge of the life thou art leading; thy very existence is now a mystery to thee. " -from 'The Bacchantes' By Euripides “During times of universal deceit, telling the truth becomes a revolutionary act.” -George Orwell
2009-08-04 19:57:16
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Hihoherewego Posts: 595 Incept: 2009-02-25
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Quote:Is that the extent of your investment thesis? No. I follow what Denninger says too. Essentially, never bet more than you can afford to lose. And if you lose it don't try re-gambling again to try and get it back until you can afford to lose that too.
2009-08-04 19:58:37
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J6p Posts: 1591 Incept: 2008-10-07
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Always good to keep 6-12 months living expenses SEPARATE from any money you risk. Helps when you need to sleep off a loss or take off b/c of one. Edit: I don't mean IRA or savings acct or anything like that either. I'm talking cash in your hands or can be in your hands in less than an hour. ---------- "Master your past in the present, or your past will master your future" -weirdchina Last modified:
2009-08-04 20:05:58 by j6p
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Hihoherewego Posts: 595 Incept: 2009-02-25
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Quote:Politics are subordinated to the monied interests. Both are intertwined. You can phuck the elections all you want. As for me I know better and will do my own thing.
2009-08-04 20:04:34
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Phirang Posts: 8824 Incept: 2008-10-25
bar khoba's revenge
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Quote:
Great! You can speculate on the association between the shuffling of functionaries in our oligarchy. I'll focus on central banks and political economy. ---------- The Treasury can issue debt on your behalf because the State can and will stomp the wealth out of you and your family.
2009-08-04 20:06:20
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Nemesis Posts: 4502 Incept: 2008-01-03
Canada
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Hiho, so between listening to Denninger and in anticipation of the election you believe we are in a bull market?
2009-08-04 20:28:41
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Goldie Posts: 244 Incept: 2008-08-02
North Carolina
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4 million!!! WTF does he need leverage for? Sol------->  I got to give him credit for admitting to losing all that cash.. Dang.. ---------- Total destruction the only solution ~Real Situation by Bob Marley
2009-08-04 20:40:36
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Stoverny Posts: 250 Incept: 2009-02-25
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Great advice as always. One thing I am asking myself is, who is buying into this market now, to hold for the long-term? Seems to be a bunch of momentum traders, all ready to bolt for the exit once the tide turns. Logic will tell you that should momentum change, not everyone can get out at once. A lot of people will get crushed on their way out the door.
2009-08-04 20:52:11
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Jcwaliski Posts: 1897 Incept: 2008-10-01
Chief Douchebag
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As far as maintaining a proper margin of safety, I like to set a stop at around 5% of total trading account capital for any trade/series of trades on any given time frame. If I'm day trading and down 5%, then I call it quits. That is the same for position trades. Right now, I'm struggling because I'm down around 4.3% on my position short bets, and we are still rallying hard with no signs of hitting a top. That being said, proper risk management starts with making sure your personal finances are in order first. Here's what I do in order of importance: 1: Demand Cash (checking accounts): 1-2 months total living expenses including reserves for insurance deductibles in case of an emergency 2: Reserve Emergency Cash: (savings accounts, physical cash on hand) 6-8 months total living expenses with up to half in FRN's. 3: Retirement Account(s): IRA's, 401K's, etc. 4: "Regular" Accounts: Positional-type account to be funded with excess capital 5: "Speculative" Accounts: The type of account that most of us here on TF are feeling pain in right now - this is the "mad money" account. This type of crap happening in the markets now should NEVER bankrupt you. If it does, then you need to go back and examine how you live your personal life. There should be at least four buffers of safety between you and bankruptcy. If you load up on FAZ and SRS in anything but your spec account, you'd better damn well have a quick trigger finger or a tiny position size. No one will feel sorry for you if you blow up anything above the speculative account. Look, it sucks... I know. I hate being on the wrong side of a trade. It hurts, but you only do it to yourself when you play fast and loose above the fifth level. Don't blame Goldman, Obama, the PPT, or anyone else but the person in the mirror if you mess up and blow out due to a lack of prudence and sound risk management. ---------- Ultimately, we are all seeking the truth--to expose it, lay it bare, own it as our own. My take on this place is simply that there will be NO COMPROMISE in exposing what IS. - Truthseeker
2009-08-04 21:00:52
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Berkleyreindeer Posts: 560 Incept: 2008-07-22 Minneapolis , MN
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I know a guy who turned 30k into a cool million in a few months...and then went back to zero. no reason other than 1 million wasn't enough! I'd have paid off the mortgage, bought a bond ladder to fund my IRA contributions for 30 years, and then bought a 6 pack of pilsner. some people don't know when to quit, so someone else has to tell them. ---------- It'll get worse. Just wait.
2009-08-04 21:05:45
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Wawawa Posts: 104 Incept: 2009-03-18 San Diego, CA
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Always go to a party late and leave early. Do NOT try to maximize your fun. ---------- RAT RACE IS OVER, RATS WON :)
2009-08-04 21:08:39
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Webjazz Posts: 1416 Incept: 2008-02-21
Adirondack Mtns
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That is a shocker that Sol blew up his account.
2009-08-04 21:30:28
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Nomullet Posts: 3422 Incept: 2007-11-11
Duke City
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Check out poker bankroll management for some other good ideas for protecting your money, especially if you are a daytrader.
---------- if you crap more than once a day you are eating too much
2009-08-04 21:32:11
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