My Trading Explained

Obama came, he saw, he conquered....oops sorry he spoke. The Jobs speech has resulted in a 0.5% rally in S&P Futures. Asia has opened up too. For whatever it is worth, the markets seem to have taken the speech as a small positive at least for now. I am long since yesterday, when the Nifty futures crossed 5150. I will cut my longs and go flat below 5087.

This really should be the end of my note. But as I look up I see only 5 lines of print. What self-respecting daily note writer can write just 5 lines? So I will try and explain what I really do as a trader. I have two trend following systems, which have been tested and which have worked for me. These are always in the market kind of systems, i.e they are either in a BUY mode or a SELL Short mode. When both of them are in the same direction i.e both are in a BUY mode, then I am long. If both are in a SELL mode, I am short. When both diverge, I have a NIL position in the market. This naturally is because I have equal weights for both the systems.

This works well for me because it gives the illusion that I know when to go long, when to book profits or losses and then when to go short or re-enter the long positions. This is better than saying that I am always either long or short on the market.

Just to remind you that I am long from 5150 levels and will cut my long and go flat at 5087.