Second February Trade

The following information is for educational and entertainment purposes only. Rio Verde Trading and the author make no claim that anyone can or will achieve similar results in their trading.

February 10: As I closed out my QQQ trade for a loss, I immediately entered a trade in SPY. The SPY trade was originally trigered on February 9, but I was unable to enter this trade until I closed out QQQ.

February 10: Bought to open 20 SPY at 185.26.

February 11: Bought an additional 20 SPY at 183.05.

February 12: Sell signal. Sold to close 40 SPY at 186.48.

Net Profit $87.00, ROI 2.6%.

SPY and the S&P 500 made a nice rebound from five days of relentless selling, giving me a welcome profit. No market goes up or down in a straight line, which is why this trading system, along with regression to the mean, works.

Gold and silver are on a tear, although pulling back a little today. The pull back did not seem to seriously affect the miners. The opinion consensus is the precious metals have made a bottom. I hope so as I am heavily, actually over invested, in gold and silver. Things are getting interesting every where you look, politics, the markets, the economy, gold and silver; I think this is what they are talking about when they say “may you live in interesting times.” Fasten your seat belts it is going to be a rough ride!

The under performance of The 74% Solution trading system for 2015 and the first six weeks of 2016 has me concerned. The win loss ratio is still around the historical average of 74%, which is encouraging. The weak link seems to be the absence of any large winning trades during this time period? The occasional big winning trade is what made the system work. It is possible that all the turmoil in the financial-banking system is affecting the performance of this system? Under the circumstances I am keeping my trades small to keep the losses manageable. I also track every trade that the system generates which should alert me if there is a permanent change in how the system performs.

The one bright spot is the out performance of my gold and silver mining shares. As long as the mining shares perform profitably, and I mean very profitably, I can afford to absorb trading losses, if I keep them small and manageable. Until The 74% Solution trading system starts acting normally, I will keep my trades small and I would advise every one else to do the same. As always I will report every trade that I make on the Blog page and will update the Trading Record page so you can follow my progress, or lack of it.