When I lecture, I always ask investors what positions there are in trading. Most respond, “Long” or “Short.” A few understand that being flat is also a position. But what most don’t realize is that being flat can actually make you the most amount of money. It’s the only way to view the market at face value.
I have never met anyone who was long and felt the market was going down, or short and thought the market was going up. If they had, I would have asked why they stayed in their position if they felt the market was going against them. In today’s new world of electronic trading, cheap money, additional algorithms and funds, market moves are much more drastic. That’s why, under certain circumstances, being flat can be the best position to be in.
Whether you are new to investing or have been doing it for years, it’s time to realize that all types of investing markets have changed. This means it’s time to either reevaluate or understand what your risk appetite is.
Many people say they only invest what they are comfortable with losing. Unfortunately, many of my clients come to me after they have had a loss and realized that saying it, meaning it, and living it are very different things.
For years, we have all seen advertisements on TV and in the newspapers telling us to buy gold. We’ve been told that it is a safe investment. For the past 12 years, for the most part, it has been, depending on how deep your pockets are. However, we saw on Friday, April 12th, that gold, at any given moment, can turn and drop fast and hard – just like all markets. Continue reading →
The Martin B Greenberg Trading Room at Hofstra University
How to Start a Trading Career While in College.
We have all head stories of the guy or girl who said how they made their first fortune while trading in college. I happened to know one of these traders and, like all super stars in any field, they are part of the very small group.
If you want to start your trading career while still in college, this is how I would tell my own children to do it. Continue reading →
Former chairman and CEO of MF Global Jon Corzine testifies Dec. 15, 2011, during a Financial Services Committee hearing on Capitol Hill in Washington. The committee found that Corzine personally ordered the transfer of customer funds to cover company losses. (Alex Wong/Getty Images)
The trustee of bankrupt MF Global Inc. settled a dispute with J.P. Morgan March 19 that will see $546 million returned to customers. Some experts think the settlement helps to return client funds quickly while others think J.P. Morgan got off too easy.
James W. Giddens, Trustee for MF Global Inc. said, “This is a significant milestone in returning assets to former customers … ending what would have been a costly, protracted, and uncertain legal battle.” He also said that the settlement avoids yearlong delays in returning money to customers. Continue reading →
Trading Tip #12: Had a Bad Trade? Handle it Like a Bad Golf Shot. It is Your Fault. Deal With it Quickly and Always Move Forward.
One issue that holds back most new traders, and separates the good traders from the great traders, is the ability to move forward after a bad trade. How many times have you heard someone say, “I lost money the market when it went the wrong way. I should not have listened to my broker. This guy said the stock would go up I am so pissed I listened to him, I actually meant to be long”?
As a trader, you need to own your trades. No one has a gun to your head to put on a trade. It is nobody else’s fault if you lose money. When you are out talking to your friends about a good trade, do you then give credit to someone else? No, of course not. At those times, you are the superstar. Continue reading →
Why Are Gas Prices So High? Here Are A Few Reasons
As an oil trader, I would tell my friends when I get upset about how much it costs to fill up my car. You know prices are out of control. Over the years, I have heard and experienced every excuse in the book for high gas prices. During my career as a NYMEX crude oil Pit Trader, there have been many real issues for the spikes in gas prices – such as the Gulf War, strikes in volatile oil producing countries, natural disasters like hurricanes, refinery shut downs, and countless speculation issues. Continue reading →
Trading Tip #11 You Want to be a Trader? Do Not Paper Trade.
There seems to be many programs for paper trading. As Seen On TV “Backtest your strategies.” Almost every on-line trading system has this. Very few strategies work all the time. I address various Trading Styles in Trading Tip #9. Unless you are in a college trading competition, I think paper trading is pointless.
There are many who might not agree with me. Let’s take the past few trading days as an example. On 2/27/2013 the market was up over 200 points . If you were paper trading, you would feel a sense of pride and, I am sure, at some point you would have said to yourself “I would have nailed it today.” Now let’s back track to 2/25/2013 just a few days before when when the market got slammed. A paper trader would not feel like their guts were being ripped out. The feeling of trying to find the right place to sell. The fear, hoping that it would not bounce back in their face. The over-whelming feeling of “when is this market going to stop going down?” Continue reading →
The Difference Between the SEC Handling of Heinz and Washington’s Handing of the Leak of the SPR in Oil is….
the SEC took action. Below is an email sent to a contact in the White House on June 24, 2011 telling the President exactly how to find out which companies might have had inside information. A contact in the White House was working on the jobs council. I had also spoken with him about the run up in gas prices. I realized that, after speaking with him for over 30 minutes, he didn’t understand what I was talking about. Continue reading →
All traders go through a bad streak now and then. The key is to keep them small and manageable. I started most days in the pit flat. My thought process was there is enough to trade during the day. Staying up all night when there was no electronic system and waiting for a call from London was just throwing the dice. Once NYMEX electronic trading system was on at night, I still felt that coming in to trade after a good night sleep was more important than what I could make staying up all night. Continue reading →