Gold dumps $48 in 1-minute

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Originally Posted by tsptalk

I bought some NUGT after hours for 3.51. Couldn't resist. This won't be a day trade. More like 1 to 2 weeks. There are some extreme oversold readings.

This was in SentimenTrader Home last Thursday (7/16)...



Like I said, this was 3 trading days ago and now we've gotten the "heavy selling."

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Nice! Looks like they were spot on.

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Originally Posted by exnavyew

FWIW:

A Ratio Worth Respecting

A Ratio Worth Respecting | Slope of Hope

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That ratio is now 2.01 to 1.

But beware the man who gives market advice who uses a bear as his avatar. The guy who wrote that article uses this...
http://cdn.socialtrade.com/comsys/users/6_YTkoDT_t

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Originally Posted by RealMoneyIssues

Yes, but again, you better be on the right side of both those trades because if not... you'd be down 76% and need 400% to recover... sux

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Word Problem:

Suppose you have a sufficient balance (six figures). You trade $10,000 per trade.

First trade, you're down 76%, or you now have $2,400 (plus six figures).

1. What dollar amount to you need to recover? $7,600!

What percentage is that? About 400%? NO.

It would be about 400% IF you were only trading with the $2,400! But, guess what? you will be trading with $10,000 on your next trade! So guess what else, you'd only need 76% to recover... or a lower percentage if you trade with more than $10,000!

When you're down to a few chips at the poker table, you don't hope for that 1000% come back, you reload up to the table max! You sit at the $200 tables (for example), not the $1000 tables even though you have over $1000 available to your atm card. It's all about money management.

It's not about the volatility of the instrument--it's about the money management. Now the above example could be re-jiggered so that the percentages are based upon the total account balance...or the total net worth of the trader. Point being folks trying to judge others by only 'what' they are trading clearly don't know a lot (or maybe enough) about trading, or have ulterior motives. (Not referring to anyone in this forum!)

Everyone can't trade volatile stocks, but not because they're volatile, but because they don't know how.

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Originally Posted by userque

Another thing that seems to be misunderstood about volatile etf's/stocks is that those stocks moving 30% in one direction is not the same as less volatile stocks moving that same percentage. Because, well, these instruments are...volatile.

If they move 10 times as much as your favorite calm stock, then a 30% move in the volatile stock is the "same" as a 3% move in your favorite calm stock. And just as your calm stock can recover from a 3% move in the wrong direction, so too can the volatile stock recover from a 30% move in the wrong direction.

:rolleyes:

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For any 1 day, yes. But for more than one day it is not the same since leveraged ETFs experience decay that whatever they track does not.

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Originally Posted by k0nkuzh0n

For any 1 day, yes. But for more than one day it is not the same since leveraged ETFs experience decay that whatever they track does not.

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I don't think two days would be a big deal. Should we run the numbers?

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Originally Posted by userque

Everyone can't trade volatile stocks, but not because they're volatile, but because they don't know how.

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Cuz, why you gotta call me out like that in public? :laugh:

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Originally Posted by jpcavin

Cuz, why you gotta call me out in public like that? :laugh:

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My bad:embarrest:

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Originally Posted by userque

I don't think two days would be a big deal. Should we run the numbers?

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Nope 2 days wouldn't be a "big deal" either. Maybe not even a week, or two, or a month. But the longer it goes, the worse it gets, and the effect adds up. Someone can just look at a chart of any leveraged ETF that tracks the VIX to see how drastic it can be. Granted that is probably one of the worst case scenarios... but so is NUGT/DUST... just look at the 5 year chart of NUGT

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Originally Posted by k0nkuzh0n

Nope 2 days wouldn't be a "big deal" either. Maybe not even a week, or two, or a month. But the longer it goes, the worse it gets, and the effect adds up. Someone can just look at a chart of any leveraged ETF that tracks the VIX to see how drastic it can be. Granted that is probably one of the worst case scenarios... but so is NUGT/DUST... just look at the 5 year chart of NUGT

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Yeah, I guess if you were trying to buy and hold NUGT, it would be a concern.

NUGT up 4.72%, DUST down 7.76%... what a joke.

A couple of years ago I wrote about a system that can not lose, but the boys won't let you do it...

Just short both NUGT and DUST and hold. But try finding shares to short. It ain't happening. At least on Scottrade. I tried for months.

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Originally Posted by tsptalk

NUGT up 4.72%, DUST down 7.76%... what a joke.

A couple of years ago I wrote about a system that can not lose, but the boys won't let you do it...

Just short both NUGT and DUST and hold. But try finding shares to short. It ain't happening. At least on Scottrade. I tried for months.

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Should be:
GDX +2.62%
NUGT +7.86%
DUST -7.86%

Are you sure NUGT is a 3x Bull ETF? :eek:

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Originally Posted by tsptalk

NUGT up 4.72%, DUST down 7.76%... what a joke.

A couple of years ago I wrote about a system that can not lose, but the boys won't let you do it...

Just short both NUGT and DUST and hold. But try finding shares to short. It ain't happening. At least on Scottrade. I tried for months.

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Shorting Leveraged ETF Pairs: Easier Said Than Done