Hey Smallie, you have a good aproach. I was also an avid fisherman at one point in my life. I liked your post about catching that first 5 pound smalljaw, then learning how to catch numbers of them. Trading is like that too. Once a person understands seasonal movements and tendencies, it becomes easier and automatic. Similar to bass, there are times when a fine tuned approach makes the difference between an occasional strike or loading the boat. I also have my favorite lures (funds) that are my confidence baits.
On the topic of TVIX, it is my newest favorite, without a doubt. I'll try to explain my approach to trading it, and why I like it so much.
I'm bearish on the market right now. Being bearish is the exact opposite of bullishness. What I mean by that is...if you were bullish on a stock, you would find it easy to buy the dips. Since I'm bearish on the market, I short the spikes. I use bear funds for shorting (TVIX/TZA/SRS are my favorites). TVIX isn't a bear fund per se, but it does trade contrarian to the market for the most part.
I watch the market with a 10 min dow chart. Most every day last week, the market popped at the open and then sold off. I saw that and used it to my advantage. I am trading the market, TVIX is a tool for trading that market. If I feel the market is going down, its the first place I turn. I still say that with an extremely volatile fund like this, a small position carries less risk with potential for large gains. I don't consider it a long term vehicle, the fund's expenses are high and this causes rapid decay in the price over time.... unless the underlying security or index rises more than the expenses. IOW-if the market turns into a real bear, this fund will exceed the expenses and appreciate in value.
This post is too lengthy and I could ramble for hours. There are so many different variables involved, that its hard to put it all into words. On this chart, I tried to point out a few things that I look for.
Good luck with your trading. Please keep posting your thoughts.
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