Let’s talk a little about investing and how to trade. As a long term investor, your main goal is to lower cost average! If you can do that effectively you will grow your account. Guaranteed!
Conversely, if you jump from stock to stock, Forex pair to Forex pair, watching your trade trying to gain momentum, or what I call lift off speed (like a rocket) trying to catch a 50 pip move. You will not Grow your account over the long term. Guaranteed! You will waste your account constantly repairing the Rocket ship (meaning you will take a stop loss, stop loss, etc.)
This type of trading is NOT science! It’s reckless DG degenerate gambling monkey schitt! STOP DOING IT!

Yesterday was a perfect example of how to cost average. Which is why I bring it up. So let’s talk about it.

1. You don’t need to always be exposed to the market. Being in Cash is a POSITION! You are just waiting for the right entry. I did not find value at -2% from all time highs, but I did find value at -7% down. As you all know I was short! market dropped -5% I took profits and reversed the trade. For simplicity purposes, Say I captured a 3% profit in SPX short and a 2% on the way back up for a total of 5% gain. Now! We are exactly where we were 5 months ago. But I have a safety margin of 5% under my belt! No matter what the SPX does even if it drops 50% tomorrow! I will still be ahead 5% relative to the benchmark! You understand what I am saying here?
2. If you have an urge to day trade and see an opportunity. You can do it IF YOU HAVE THE SKILL! BUT! ONLY! in the direction of what the MMT fundamentals tell you in that very same pair! Only below your cost average. NOT Above! And DEFINITELY NOT MORE Than your allowed position size. (Note below what that means) Conversely you can only Hedge up to your limit of exposure if you are betting against your position. Anymore than that you may be hurting your cost average. Now, if you start day trading 10 times a day 50 times a week, 5 times your allowed size, well you missed the entire point of what I just said.
3. Day trading or short term trading is a tool. Not a strategy to make money. Just like a stop loss is, just like options are, leverage, time, cash etc.. They are all tools! If you use each tool correctly, you will continuously strive to improve you cost basis till such time prices stop flirting with your cost basis and the stock or pair starts moving away from you faster and fater and profits start to pile up day, after day, after day till your core position reaches your target. What I call Break Away speed for the Rocket ship.

** Position size guide.

1 unit = 0.01 or 1% per $500 of actual money in your account times your leverage. So $500 X 0.01= 5 X 100 = $500 ($500 X 100 leverage = $50,000) One percent is $500. Make sense?
1 Core position = 3 to 5 units or $1500 to $2500 or 5% of your total leveraged mount. That is a core position. You can go up to 8 units of you do not have more then 5 core positions on at the time. this will lead you to over expose and you will start with margin calls.
1 Bullet = any unit above your core position (core might be 3 or 5 units) For example I bought a total of eight units. my core is 5 that means I have 3 units in excess of my core, which are Bullets. I sell them when I see them profitable to reduce risk and improve cost basis.

Simple example I buy one unit at 10 and another unit at 5. Cost average is now 7.50. if price goes to 10 I sell the first unit I bought at 10 and my cost basis went from 7.50 down to 5. Clear? If I buy again at 6 my cost avg goes up from 5 to 5.50. No! Don’t do that. the goal is to LOWER cost avg not raise it again. Even if it is better than the previous 7.50. Now what if the price goes up to 10 again and you sell 1 unit? Well that is a healthy profit. You must reduce that amount over the remaining 5 since you once again lowered your cost basis. Deduct the profit equally over the remaining units left in your core position size. if you keep hammering at cost basis working it over time. Eventually your profits will soar! You account gets bigger, your unit size increase, and your profits will grow exponentially! Buffet shit! Believe me, IT IS BORING! BUT! YOU MAKE MONEY! You want your rocket ships to constantly lift off to break away speed and go into outer space at 18,000 MPH!

Sitting here on the launch pad barely getting off the ground, crashing rocket ship after rocket ship jerking yourself off WILL NOT MAKE YOU MONEY! You are trading random VIBRATION! GUESSING! STOP LISTENING TO THE SHILLS TELLING YOU OTHERWISE! THEY ARE ALL FULL OF SCHITT! the whole system is designed to get you to think vibration is the way to trade. IT’S NOT! If they were right they would all this Buffets running around!

LEVERAGE!

Leverage is NOT there for you to go balls deep and become a millionaire over night! Learn how to use leverage to your advantage. To avoid blown out accounts. The more leverage you have and the least you abuse it, the more money you will make. The key is to grow your account slowly using leverage over time and increasing your total leverage exponentially. I already showed you that a 1% of a $500 account = $500 Which is the total amount of your cash in the account.you don’t need 75% TO MAKE MONEY! You need even as low as 1% to make money. Even if you are good enough to invest in 5 positions and you follow my guide, that is still only 25% of your leverage or 25 times your actual account size. that is HUGE! Almost dangerous for me to even suggest that. But I am compromising between your greed and somewhat sensible trading. you should be more like 7 to 10% Max.

I hope this made some sense to you all. If you have any questions, just message me.

Author
Jim Boukis