Have you thought about day trading for living at any point in your life? If you’ve ever thought of this, then your reasoning is probably quite sound.
Money has little to do with life, though it does make for good situations, and in some cases more happiness. If you decide to embark on day trading as an option for a living, then you will find that you have plenty of money to spare!
Money is one of the biggest motivations for most individuals in the the day trading world. Naturally there are many things that need to be done, obstacles to be averted.
As you’ve probably guessed, there have been many people who succeed, and there are a number of things that they did to achieve success. Based on that, there are a few
tips that you can use to make yourself successful.
First and foremost of all, one of your best options is to employ the services of a decent robot trading program. You might be tempted to just jump in head first, but you will no doubt lose money. Having a robot help you along the way, and showing you
the best way to make a trade is how you will turn a profit when you want to day trade for a living.
Make sure you examine everything that you have done. That means every single trade! It doesn’t matter if it was a successful trade or an unsuccessful one, examining it will help you out. By determining where you went wrong, you will figure out how you can go right next time, which could make all the difference in the world.
Reviewing your trades will help dramatically in this regard. Look for common trends and see if you can duplicate the successful ones. Rinse and repeat. Yes, this can be a lot of work but the rewards in the short term is worth
it.
By using this strategy you will be able to devise some sort of system for trading. When you perfect your system you will find that it becomes much easier to make your
way as a day trader. You will find that this is much better than making random trades
and hoping for the best. If you come up with a good system, keep using it and you will emerge triumphant.
Never trade out of obligation, you don’t have to do anything that you do not want to do. You should only make your trade so long as you believe it is the best thing for you. You also must not assume that it is necessary to trade every single day. Doing this will end your career rather quickly, which is pretty counterproductive.
If you find that you are losing money, then ensure that you find a way to decrease your losses. Utilising stop losses will be a good idea. Don’t gamble and try to get
back the money that you’ve lost. If you’re smart about it, then you’ll find that you have more success and you will have a better day trading career.
Make sure that you don’t spend too much time trying to change things that you simply cannot. Remember that the market will change constantly, and it’s not something that you can fix. It won’t always go your way!
Study as much about the market as possible. You can very have too much of an education and this is most evident in the world of day
trading.Learning as much as you can about the process will enhance the odds of success dramatically.
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I’ll be telling you about 15 characteristics of a very successful trader.
Trading in stock isn’t everyone’s cup of tea. Some people can do it and some can’t. Even among the some who can, not everybody can be successful at it. While there are no hard and fast rules on what makes or doesn’t make a successful stock trader, those Wall street Wizards that you hear about who made the most in the least amount of time, all appear to have certain characteristics in common.
1. Successful stock traders are able to go against their natural instincts.
2. Successful traders have a simple system. No matter which technique you use as long as you stick to it. A Successful trader knows their technique and makes trades based ONLY on their system. “The secret to being a winner is consistency of purpose”. You want to improve a separate strategy for getting into a position and for exiting one.
3. Successful traders are risk Adverse. Successful traders don’t like losing money and prohibit themselves before losing too much, even if it means admitting they made a mistake.
4. Successful traders are willing to make mistakes. Successful traders have the right and ability, not to do the right thing, but to do the wrong thing. It’s the ability to make your own mistakes.
5. Successful traders don’t care about being embarrassed by taking a loss. Successful traders expect to take losses and know when to cut them.
6. Successful traders know, or learn how to explore stocks. Many traders only use precise analysis, but you may want to learn to use fundamental analysis as well.
7. Successful traders lead balanced lives. We all know the pleasure of the pursuit and the stock market can be addicting, a successful trader is one who knows when to move away and can.
8. A successful trader is Patient. A successful trader let’s winning positions run, but is able to back out when proven wrong. Patience can mean resilience, courage, and conviction for when markets go against you.
9. A successful trader has a biting Desire to succeed. Triumph takes steady work not a chaotic effort, a biting desire to succeed can make all the difference in educating yourself about what you want to know and sticking to your strategy when the going gets rough.
10. A successful trader is disciplined. Very disciplined. A successful trader will do what he needs to do, even if he isn’t in the mood. Discipline also means Sticking to your strategy, not abruptly buying or selling on a whim, or because of a” hot tip”
11. A successful trader knows the difference between defensive and offensive behaviour, and when to use each. – protect your money first, profit later.
12. Successful traders don’t eavesdrop on rumours or get emotionally involved. To be a successful trader you have to be very hard on yourself. Your have to be able to resist the urge to prove you are right and be ready to make mistakes. . You also want to be able to not let emotions affect your decisions. Setting up stop loss points for every decision you make is something that you are going to have to do. That will mean more than occasionally admitting that you are wrong. You and your portfolio will survive and you will be able to get back into the position again when trends signify that the time is right. You will have to learn to disregard any emotional ties you have to your stock and make quick stock trends your master. You will miss the lowest entry points and the top selling points, but you will be able to sleep at night. You will need to learn to get out of a stock position before your profits turn into losses.
13. A successful trader knows themselves. Successful traders must be attentive of their strengths and weaknesses. Your strengths and weakness will become very important. Play on your strengths when you can.
14. A successful trader knows their investments. Your investments are almost as important as you are. Know the past history of the stock and their strengths and weaknesses as well.
15. A successful trader sticks to the rules. The system is there for a reason. Nothing can ruin a successful stock buyer as quickly, or as certainly as flouting the rules.
Get to know these 15 characteristics and you are on your way to becoming a successful trader.
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Dow Jones and Company reported Monday that it would be adding two additional businesses to its industrial average. The two businesses are Travelers as well as Cisco Systems. Needless to say, when two go in the average, two need to exit.
Given the news that has happened with GM over the past few months, it is a no brainier that GM would be cut from the average. However, Citigroup was also given the boot.
Travelers was once a subsidiary of Citigroup and will help uphold the representation of financial companies in the average.
Citigroup has had a pretty bumpy year with subprime lending, the credit crisis, and eventually the recession taking huge cuts from Citigroup. Citigroup is the second fiscal business to be dropped from the average throughout this recession, the first being AIG. AIG was taken off the average in September after the government took an 80% stake in the business and lent it several billion dollars in bailout cash.
The Dow industrial average is made up of 30 stocks. These stocks are a measure of the market and what the general public regularly looks at to compute the health of the markets as well as the economy. It is right now made up of (on top of Travelers and Cisco) 3M (MMM), Alcoa (AA), American Express (AXP), At&t (T), Bank of America (BAC), Boeing (BA), Caterpillar (CAT), Chevron Corporation (CVX), Coca-Cola (KO), DuPont (DD), ExxonMobil (XOM), General Electric (GE), Hewlett-Packard (HPO), The Home Depot (HD), Intel (INTC), IBM (IBM), Johnson & Johnson (JNJ), JPMorgan Chase (JPM), Kraft foods (KFT), McDonalds (MCD), Merk (MRK), Microsoft (MSFT), Pfizer (PFE), Procter & Gamble (PG), United Technologies Corporation (UTX), Verizon Communications (VZ), Wal-Mart (WMT), and Walt Disney (DIS).
The changes will start next Monday.
Citi has been on the Dow industrial average for 12 years, at which time it was listed as Citicorp. It turned into Citigroup in 1998 when Travelers Group combined with Citicorp. In 2002, Travelers was spun off another time and has been a unconnected company ever since. So, it is a bit odd that the parent business has fallen off the average and has been out performed by its subsidiary.
In actuality, Travelers is accepting AIG’s formerly held spot in the average. The center product of both corporations is the same; casualty insurance sales.
GM has to get its act together to even be considered before it is listed on the average yet again. It will likely be years for the once strong auto corporation to see the tops of any list. Of course, I do consider that bankruptcy was a footstep in the right direction. If it were left up to its own devices, GM would have been run into the ground a year ago, if the government wouldn’t have come in. Worse, if they didn’t file for insolvency and couldn’t restructure, the government would have lost all of our money in the GM “gamble” and would be heaving money into a unlimited abyss.
Find the most recent on Dow Industrial Average while reading up on some stock information.
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When you invest in stocks there are lots of things to consider. But most people hit the wall because they don’t know the best time to invest. I was exactly like this; I was so concerned about not getting in at a high price, that I ended up not getting in at all. And then I watched as other people made a killing and I was left disappointed. So let me give you these words of wisdom…you can take that stock investing leap and not come crashing down. You just need to learn how. Stock Market Software
Whilst a good Broker is worth his weight in gold and can give you sound advice on what shares to buy and when to buy them, you’re still investing just like the novices. If you want to invest in stocks the 21st Century way, you need to add some special weapons to your arsenal.
My number one secret weapon to investing in shares is “Buying Shares at a Discount”. And when you do you can save $5,000 or more. When you buy stocks at a discount, you immediately reduce your risk because the stocks price would need to fall a lot before you lost any money. This means that trying to pick the highs and lows (which is impossible anyway) becomes less critical.
And when you buy stocks at a discount you effectively make an instant profit. This is not illegal and not a scam. So instead of going crazy trying to pick the exact point to buy stocks, you can mitigate the risk simply and easily with this technique.
Now this strategy is something anyone can do, in fact those who know how use it all the time; but you won’t catch many talking about it. We think the average investor should be able to enjoy this strategy. If you’d like to save $5,000 or even more when you buy shares, take a look at this free video… Investing in Stocks
The amount you’ll save depends on how much you’re buying. In some cases you’ll save 5% often 10%. As you get better at this strategy you may even be able to make an income from this investing technique without actually ever buying the shares. This can be a great cash flow system but of course you need to fully understand and manage the risks.
People will tell you that doing anything a bit different is risky, but that’s only true if you don’t understand the risks. It’s exactly the same as crossing the street. If you don’t know how to cross the street and just walk out, chances are you’ll get badly hurt. But if you appreciate the risks and manage them by crossing when the walk signal shows, looking both ways etc. the real risk of crossing the street is small.
So check out the video, get the extra material after the video and learn the technique and save some serious dollars. Paper Trading
One of the most powerful technical analysis tools available to traders on the market today is no doubt the Japanese candlestick techniques. The history of candlestick techniques goes back to 1700 century in Japan when a futures rice trader who discovered that although prices are determined by supply and demand, when emotions or market psychology of the traders are taken into account, it could play a major shift in prices actions and this is seen across different market such as stock and option market, not just the futures market.
Even though this tool has been around for a few centuries and regarded as a very important technical indicators among any traders arsenal, it only aroused the interest of traders around the world about two decades ago when the first book – Japanese Charting Techniques written by Steve Nison in the late 1980s, grabbed the centre stage in the western world of technical analysis.
The principle behind this ancient technique is that it can capture market sentiment more accurately than any other form of technical analysis tools on the market. Many traders have tried to forecast or predict the stock market using traditional techniques or indicators in the past, and needless to say many have failed along the way. What distinguishes candlestick techniques from other form of technical analysis is that due to its unique patterns with the emphasis of the relationship between open/close and high/low, the market emotions which is regarded as one of the most significant factors in moving price action in the short term, is priced or formed into the patterns and it is the basis of the candlestick techniques which can be used to form an opinion of what the market is thinking at this moment.
So why trade Candlestick? The answer is already very obvious. It not only can help traders or speculators alike to profit consistently in the short term, it also gives traders an edge over those who is still relying on traditional form of technical analysis to try to beat the market. One of the most important signals within candlestick is the reversal patterns signal. It is one of the most powerful patterns and what most professional traders rely on to make a killing on the stock market, or currency market, etc. Reversal patterns can be very powerful when used correctly, however the same reversal patterns can happen during an uptrend or down trend, if a trader interprets the signal incorrectly, he or she might end up burning his/her money quite a few times before they can see real profits. Therefore any traders who is really looking to learn this form of ancient art should really sit down and take the time to learn it or they can seek help from some one like B.M Davis who teaches traders online how candlestick techniques should be applied in your day to day trading and what patterns give the most accurate signals and what ones tend to be invalid signals, so that you too can also be a profitable trader using this technique.
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We can go back in stock market of the US to more than 200 years. The colonial government financed the war through promoting government notes and bonds with a assurance of paying with profits at a later date. Private Banks also started issuing stocks to raise money. The New York Stock Exchange was created in 1792 with the meeting of the four largest banks. They agreed to congregate on Wall Street daily to trade bonds and stocks.
The US was witnessing vigorous growth during the mid 1800s. Companies needed money to fund the new demand and they believed that public would be interested in investing in stock and buying limited ownerships. It is certainly the Investment Markets that helped the expansion of the US economy significantly. Stocks worth millions of dollars were traded by 1900 on the street. The stock marked moved to indoors in 1921 following 20 years of street trading.
The stock market history owes a great deal to the business revolution. A new form of investing began when the investors realized that they can make income by reselling the stocks leading to the materialization of the secondary market or speculators market.
NYSE is one of the highly regarded among stock markets since they trade stocks of significant and established companies. The lesser companies formed an option that went on to become the AMEX (American Stock Exchange). NASDAQ was established once the telephony was invented. Despite the different origins the AMEX, NYSE and the NASDAQ contribute significantly to both the US and global economy. As the number of participants in the market grew substantially the government thought to implement better regulatory mechanism in order to protect the investors. Then the great crash of 1934 happened. The Congress passed the very famous Securities and Exchanges Act that led to the creation of Securities and Exchange Commission (SEC). This body over sees the US stock markets with help from exchanges. The organization makes sure that companies have essential qualification to offer shares in the market and they offer relevant information to the investors. The SEC watches the market actions and how the stocks are offered and traded in a day to day basis
The US stock markets crashed again in 1987 as the DOW hit the record 2722.44. The market lost half a trillion worth of dollars. The causes for the markets were many. Then again, the most significant were related to liquidity, overvaluation of stocks and derivatives securities and computer trading. Reforms made in terms of margin requirements and trading systems. Circuit breaker mechanism was established to prevent crashes. The circuit breaker system halts trading if the market goes down beyond certain point.
The stock market history has been rewritten with the dawn of electronic and automatic stock trading systems. Today’s stock market contains more than 300,000 computers networked among licensed traders linking another 26 million computers worldwide between banks, corporations and small businesses. The financial markets in New York are dealing with more than $2.2 trillion daily.
As a currency trader it is very likely that you also keep an eye on the price of gold, because as you well know, there is often an inverse correlation between the strength of the U.S. Dollar and the price of gold.
Never has gold been in greater demand than it is at present. It is almost as if someone somewhere knows that something is going to happen to put the price of gold through the roof.
Do you remember the 1964 film – Goldfinger, Directed by Guy Hamilton?
Goldfinger’s film scheme, codenamed “Operation Grand Slam”, involves breaking into the U.S. Bullion Depository at Fort Knox, penetrating the main storage building with the high powered laser, and detonating a “dirty” nuclear weapon inside, thus contaminating the United States gold reserve and thereby dramatically increasing the value of his gold holdings.
If only Auric Goldfinger had known that all he needed to do was to undermine the strength of the U.S. Dollar, the fictitious multi-billionaire could most likely have succeeded with his task much more effectively by shorting the U.S. Dollar than was the case in the film.
Now it may be apparent to you that as a forex trader you can glean some information by watching gold prices, but did you know that many forex brokers now allow you to trade spot gold on the same platform as the one that you currently use for trading currencies? And most likely if your forex trading system or forex software works well for currencies, it will work surprisingly well for trading gold too.
When trading spot gold, like with forex trading, you are not required to take physical delivery of the gold.
So what do we know that might contribute to the future meteoric rise in the price of gold – or otherwise, for that matter!
In the film, James bond is – at one stage, strapped to a slab of gold with a laser beam cutting through that same golden slab and not too far from splitting the noble Mr Bond in two.
James asks: “Do you expect me to talk?”
Goldfinger replies with the all time classic line: “No, Mr. Bond. I expect you to die.”
Well trying to find out what gold may do next is almost as tricky a situation, but we do know some things for sure…Well almost for sure.
Of all the precious metals, gold is the most popular as an investment.
Investors generally buy gold as a hedge or safe haven against any economic, political, social or currency-based crises. These crises include investment market declines, currency failure, inflation, war and social unrest.
Investors also buy gold during times of a bull market in an attempt to gain financially.
So do we currently recognise any of these situations? I would suggest that we most definitely do.
But is gold a “good” investment? Well from a traders’ point of view, it really does not matter, so long as we can accurately predict what it will do next. But to answer that question I quote from an article in Wikipedia:
“In November 2005, Rick Munarriz of Motley Fool.com posed the question of which represented a better investment: a share of Google or an ounce of gold. The specific comparison between these two very different investments seems to have captured the imagination of many in the investment community and is serving to crystallize the broader debate.[26][27] At the time of writing, a share of Google’s stock and an ounce of gold were both near $700. On January 4, 2008 23:58 New York Time, it was reported that an ounce of gold outpaced the share price of Google by 30.77%, with gold closing at $859.19 per ounce and a share of Google closing at $657 on U.S. market exchanges. On January 24 2008, the gold price broke the $900 mark per ounce for the first time. The price of gold topped $1,000 an ounce for the first time ever on March 13, 2008 amid recession fears in the United States.[28] Google closed 2008 at $307.65 while gold closed the year at $866”.
Coincidentally, at the time of writing this article, gold is at $1036 and the most current google share price is $533.43, so I would conclude that for the present at least, gold can be a very attractive investment vehicle.
One trading method that does not get a lot of attention is momentum investing. It is a strategy that can make huge returns and has been proven to produce magnificent gains in the past.
So, what is it? Unlike conventional investing where the goal is to buy low and sell high momentum investing is the practice of buying high and selling higher. Instead of trying to find cheap stocks in the stock market it attempts to find stocks that are continuously making new highs and get into them assuming that the trend will likely continue.
I have personally seen how powerful this strategy can be. A stock that is trending up and making new highs will likely keep trending up and keep making new highs for a long time. It is not unheard of for a stock which has just doubled in price last year to double again the next year.
Of course this does have two sides to it. If a stock has moved up so much there is a lot of room for it to fall. A $100 stock can fall a lot further then a $10 stock after all.
Because of this it can be a good idea to actively manage every trade. Instead of staying in a stock for the highs and lows, selling at the first sign of weakness and attempting to hold onto it only as it continues to go up can have impressive results.
While momentum investing is not for everyone here are some stock tips to help you make the most of it.
1. Develop a System
If you are trading the market you can no longer just buy a random stock and hope that everything turns out all right in the end. Instead developing a system which has precise entry and exit point is the only way to get any consistency in your trading results.
2. Cut Losses
If a stock you buy goes down, that means that you where wrong. There is no need to let the stock fall down 60% or more before you decide it was a bad trade. Instead getting out at the first sign of weakness allows you to save your money and keep any profits you do have.
3. Control Your Emotions
Emotions will sometimes get the better of you when trading. in the stock market. There were many times when I was up 20% on a position and I just want to get out of the trade, at least I know I have made money after all.
But more often than not going with your “gut feeling” will lead you to large losses. That is another reason why it is important to develop your own trading rules. If you have specific guideline to follow when entering or exiting a trade it will help save you from making a bad, spur of the moment decision that you will later regret.
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James Grant penned a commentary in the weekend edition of the Wall Street Journal (September 19, 2009). James is always worth reading (Grant’s Interest Rate Observer). He has been a moderately bearish commentator for as long as I have been reading his work (10 years), most often in Barron’s articles. He has bemoaned the high consumer and national debt and the very low (even negative) personal savings rate in America. For this, he has called for a weak dollar and higher interest rates for the past decade.
That he flys in the face of his brethren bears is of no small consequence to me. Normally James Grant’s perspective is closely aligned with so-called other “bond vigilantes” like Bill Gross at PIMCO and perma-bears like Bill Fleckenstein or Peter Schiff. Those other dollar sellers / interest rate watchers are still looking for a flat to declining economy and dollar and moribund economy. Grant really is making a departure from his club here, which is good because it is contrary.
He was early to call the stock market decline, as far back as 2005. But this is news: now he sees it is time to become Bullish, if for the all the wrong reasons in his view. James Grant is leaving the Bear camp (maybe six months late). Here is an excerpt from his article.
Though we can’t see into the future, we can observe how people are preparing to meet it. Depleted inventories, bloated jobless rolls and rock-bottom interest rates suggest that people are preparing for to meet it from the inside of a bomb shelter.
The Great Recession destroyed confidence as much as it did jobs and wealth. Here was a slump out of central casting. From the peak, inflation-adjusted gross domestic product has fallen by 3.9%. The meek and mild downturns of 1990-91 and 2001 (each, coincidentally, just eight months long, hardly worth the bother), brought losses to the real GDP of just 1.4% and 0.3%, respectively. The recession that sunk its hooks into the U.S. economy in the fourth quarter of 2007 has set unwanted records in such vital statistical categories as manufacturing and trade inventories (the steepest decline since 1949), capacity utilization (lowest since at least 1967) and industrial production (sharpest fall since 1946)……
…..By rallying, equities and corporate bonds not only anticipate recovery, but they also help to bring it to fruition. By opening their arms wide to such previously unfinanceable businesses as AMR Corp., parent of American Airlines, and Delta Air Lines Inc., the newly confident credit markets are implementing their own stimulus program. “Reflexivity” is the three-dollar word coined by the speculator George Soros to describe the dual effect of market oscillations. Not only does the rise and fall of the averages reflect economic reality, but it also changes it. One year ago, the Wall Street liquidation stopped world commerce in its tracks. Today’s bull markets are helping to revive it.
I promised to be bullish , and I am (for once)—bullish on the prospects for unscripted strength in business activity. So, too, is the Economic Cycle Research Institute, New York, which was founded by the late Geoffrey Moore and can trace its intellectual heritage back to the great business-cycle theorist Wesley C. Mitchell. The institute’s long leading index of the U.S. economy, along with supporting sub-indices, are making 26-year highs and point to the strongest bounce-back since 1983. A second nonconformist, the previously cited Mr. Darda, notes that the last time a recession ravaged the labor market as badly as this one has, the years were 1957-58 —after which, payrolls climbed by a hefty 4.5% in the first year of an ensuing 24-month expansion. Which is not to say, he cautions, that growth this time will match that pace, only that growth is likely to surprise by its strength, not weakness.
And that is my case, too. The world is positioned for disappointment. But, in economic and financial matters, the world rarely gets what it expects. Pigou had humanity’s number. The “error of pessimism” is born the size of a full-grown man—the size of the average adult economist, for example.
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Doug Kass recently predicted the S&P500 stock index will finish the year at 920. It is currently right at 1000 (on September 2, 2009). I agree with the prediction of 920 sometime in the next couple of months. I think 900 may be possible and even lower to 875 based on the bottom set in July. But unlike Kass, I think the market will rebound by year end. I will wait for signs of a possible rebound once this current drop (begun last week) is further along. The signs of the bottom to this dip will be a stall in the decline just as the recent market top was shown by a stall or resistance around 1040. The rebound will happen when the market goes up on bad news. I think that may happen during the Q3 earnings season the middle of October into early November. I am still thinking that 1200 is a possibility by year end. This would completely retrace the panic selloff starting from the Lehman collapse on September 15, 2008. So, if we wait until 900 to redeploy our cash raised the past few weeks, that could provide a nice 33% finish to the year.
Where Kass is probably wrong, along with many others on Wall Street, is that there are just too many people with a bearish market view. There is virtually no one on the financial networks (CNBC, Fox Biz, etc) today saying that the selling should be ignored and the market will go much higher. There are just no Bulls as far as I can tell. The market always confounds the consensus position. It has to in order to work. If there are a majority of bears, then by definition, there is hardly anyone left to sell. Once all of us who had our finger on the trigger, pull the trigger, there isn’t anyone left to sell. So, I think the decline will be shallow and the market will rebound in 6-8 weeks. This can’t be like the panic last year because all the retail investors that bailed out in the fall and winter are still on the sidelines. People who sold everything in January and February never got back in.
There are a lot of factors to a panic that are missing right now (as they usually are, fortunately). To get a true financial panic, first everyone must be euphoric and unaware of or discounting trouble. Then when the decline starts because the market just can’t go any higher (everyone who is going to buy has bought), investment holders must be forced to sell at any price by margin calls or other financial misfortune. Last year, there was a cascading of events that are no longer in play. Most importantly, the leveraged, collateralized securitization market, the core of the trouble, is almost completely unwound (except CMBS, which is where there is still concern). The leverage in 2007-08 was in the carry trade, which is what caused the dollar to soar and interest rates to drop when foreign currencies were sold and dollars bought to cover margin calls. The securitized loans are mostly back inside the big banks now with backing by government guarantees or in private hands where they have been de-levered which allows them to be held to maturity, if needed. So, there are no large institutions needing to dump stock or other financial instruments into an illiquid market to raise money to stay afloat. That is a big and significant change.
On the way down, I am using portfolio hedges to protect my positions. I like the SP500 Double Inverse fund by Proshares, with ticker SDS.
I like this ETF because it is a double short of the SP500, which is a pretty basic / broad index of the market and includes all the big financials, techs and energy companies. I also hold another hedge, hte Proshares product called DUG. DUG is basically the double inverse of the energy market, something like IYE but with a little Materials exposure too.
I use it to hedge all my Materials and Energy exposure, although I also use covered calls for this on stocks like Suncor that have good premiums. I also have used covered call options on the Canroys, but the premiums are not very good because of the large dividends. It is just an alternative to outright selling them.
Even though it has become popular, I don’t do those Direxion 3X ETFs. They are just too wild for my taste. Even the doubles are a little scary and I am careful to keep my exposure balanced with opposite long positions. I don’t bet naked short, even now when I am pretty convinced the market is going lower. The market always goes up in the long run, so being short should be very tactical and short term. I don’t want to get caught on the wrong side of that trade.
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