Re: [TheOptionClub.com] terry's tips

Jack,

 

Unfortunately it has been a long misguided journey for me and over the last ten years that I have been at it has not really paid off for me as well as I would have hoped.  It was not until that last few years that the proverbial light bulb was lit and I started to understand what it really takes to run a trading business.  The unfortunate part is I suffer from extreme analysis paralysis and can not seem to really get anything down on paper that I could consistently follow to become profitable (I have been profitable every year but you can't really grow an account when your best year and worst year is single digit returns).

 

I, like MANY other people went through (and still going through) all the classic stages of learning the skills required for trading.

 

1.  Blatant refusal to be believe other people when they tell me that the trading service providers won't help me make a million dollars out of my meager $5,000 account balance.

 

2.  Thinking that using every indicator under the sun will some how give me an edge over everyone else.

 

3.  Trying to invent a Holy Grail system that works consistently every year, in every market, and in every market condition

 

4.  Thinking that taking on a little more risk won't blow up my account because I am some how different than everyone else and the emotions that I am feeling are not really fear and greed.

 

5.  Instead of focusing on a few instruments to trade and focusing on a few strategies I jump from one "hot" stock to another and have tried everything from covered calls to double diagonals.

 

6.  I could probably go on forever here but then we would be missing the point :-)

 

So here are the rules that I think everyone can agree on:

 

1.  Keep it simple

 

2.  Use Position sizing - I have read Van Tharp's Position sizing book and great book if you want a TOTAL picture on money management but for options on equities I can save you some money. 1% or 2% max risk (you can use more if you are not ultra conservative like me).

 

3.  I have heard 70% for positions and 30% for adjustments and that probably works just fine but again my fear of losing large amounts of money holds me to the 50%/50% mark.

 

4.  Use some sort of technical analysis (I am sure this one will be debated until the cows come home but this is my opinion) - statistics are a funny thing... some times they are right and sometimes they are wrong.. .but you want to at least know that you are seeing the same picture as everyone else.  Even though Van Tharp can show examples of a coin flip trading system making money over the long terms.

 

5.  Focus on a few trading vehicles and really get to know them... paper trade them for a year or more if you have to.  I am following IWM, OIH, TLT, EEM, DIA and SPY.

 

6.  Focus on no more than two or three trading styles until you are consistently good at them. - I have currently abandond all directional trading and now use calandars and butterfly's (when beta weighting these positions the fly's offset the calandar vega so the over all portfolio is a little less volatle.)  I like theta decay but this may not be for everyone... it is fairly boring.

 

that is all I have time for today... if any one out there has two cents then please post away.

 

thanks,

 

Joey

On February 27, 2010 at 2:39 AM jackcrawford72 <jack@drofware.com> wrote:

 

 

Trading is 70% Money Management, 20% System, 5% avoiding emotion, 5% dumb luck :-)  so if you don't get the 70% part right then you don't have a chance making it long term.  

Joey,
Would you care to share your Money Management rules?  It seems like you have been doing this for quite a few years and probably have some good advice.  Maybe a good reference.

Thanks, Jack

--- In OptionClub@yahoogroups.com, Joey Huckabee <trading.ocyg@...> wrote:
>
> I paid for Terry's tips around 2000-2003 before the "mighty mesa strategy" was
> "invented" and can say that Terry's program is a very poor example of trade
> management.  He claims to have years of experience but back then he certainly
> did not convey very much of the experience that I would expect to see.  Over the
> last nine years that I have been studying the art of trading I believe that I
> have come to the appropriate conclusions that brought me to this group in the
> first place.  Trading is 70% Money Management, 20% System, 5% avoiding emotion,
> 5% dumb luck :-)  so if you don't get the 70% part right then you don't have a
> chance making it long term.  
>  
> With Terry's Tips I monitored his 10K strategy for 3 years and watched as
> members lost there entire $10,000 balance for three straight years simply
> because the 10K system did not provide any stop loss and frequently took 100%
> losses on positions that were put on and even "doubled down" at times that ended
> up worse than if you just stuck with the initial capital invested.  The only
> reason I post these disparaging remarks is because the time period that I
> monitored his trades was a very volatile time, not unlike what we are in now,
> which caused his indicators to change directions then get whipsawed.  He went
> through a period of giving out free memberships to existing members because of
> the extreme losses (I received two years free).
>  
> No as for the "mighty mesa strategy" if I remember correctly it was just a bunch
> of calendar spreads (or double diagonals) that required a huge amount of capital
> locked up in a single trade which would expose those of us with small bank rolls
> to enormous amount of risk.  So unless that has changed I would say that Terry
> is still consistently breaking even or losing money and making money with his
> advisory service.
>  
> On a side note - everyone that posted "if you could make a ton of money through
> an advisory service then wall street would be in trouble" it really does ring
> true.
>  
> Joey
>
>
>
>
> On February 26, 2010 at 7:18 AM Alexander S alexstjo@... wrote:
>
>
> >  
> >
> >
> > Hi,
> >
> > I was wondering if anyone is using terrystips.com mighty mesa strategy
> >
> >
>