At the end of the day (literally…..not the metaphorical use, which came into vogue about a year ago, and which bugs me ever-so-much) all that matters is whether there is more money in your account than when you started in the morning.
By this measure, today, for me, was a good day. But how could that be? At the start of the day…
- I had a six-figure position in DBA, which was a total pig today
- I had an even bigger position in DIG, which also stunk up the place
- I got stopped out of both at a loss
- My IRA account is 40 positions, all of them long, all of them speculative
- I entered my ES short today, as opposed to days ago, when prices might have been better
So how is it that I was able to end the day with a meaningful five-figure positive different in my account? One word: flexibility.
My DBA and DIG trades were a mistake. I got stopped out at a loss. Good. Because the loss I woudl have suffered would have been much larger at the end of the trading day.
My IRA picks, although long, were carefully selected, and they managed to hold fast even during today's turmoil. Yes, that account ended with a loss today, but the loss was minuscule, and in fact that account was in the green most of the day. In addition, even though the positions are only a few days old, almost all of them are still nicely in the green.
The ES trade – – which constitutes easily half of my profits for the day – – was entered at a "safe" level (about 866), and I was able to enter it without emotion.
One must stay flexible and nimble in a market like this. Lord knows I can't dance, but you have to be like an agile dancer. It doesn't mean being carpricious. It means being open to possibilities other than those you may have recently adopted. A case in my point is my whole EUR/USD—->Commodities/Oil thing. That didn't work out yet. I was positioned to benefit from a big rise in commodities. Not only did that not happen, but I lost money.
The difference is that I was willing to recognize that, "Gee, even though EUR/USD is up, DBA and DIG and OIH aren't participating, so something is very wrong with this picture." Based on that observation (remember, speculation is derived from speculare, the Latin verb for "to observe"), I changed my strategy.
As for the jobs report in the morning……….that comes down to a matter of luck. It's going to be a market-mover, and those heavily short could get their heads handed to them. Or they could have a huge payday. For myself, I cut my ES position in half in order to reduce my exposure. Besides that, though, we will have to play the cards as they are laid before us.
