Buy Low Sell High, Limit Your Downside, Take Profit Often (In normal market I would let my profit ride but not this market right now)

Someone commented on an article posted on ZeroHedge yesterday and I quote "the market is so rigged and non-efficient that no position makes sense, and that taking any position is just gambling with cheaters at the table". Indeed, the market has become a roulette game, a market where its liquidity is powered by HFT's fast churning machines and algorithms. It seems each day the market decides on a fresh start and off she goes up and down (collective greed or fear), fundamentals aside. Dotcom bubbles deja vu. It is news snippet driven, and that 99% of the time is a rehash of someone's else post on twitter. Pre-market volume has dried up as no one dares to make the first move for fear of getting whipsawed once the bell rings. One never knows what is around the corner and which HFT or hedge fund will be calling the shots during the first 10 minutes and every minute after that. It is the biggest casino in the world.

Can a savvy stock picker still manage to come out ahead? perhaps. Traders and hedgies are pushing the envelope ever so slightly until it falls off the table, especially those who are playing catch up compared to their peers (or is it their bonus). There are two sticky notes on my walls staring at me that read "Buy Low, Sell High and Take Profit". I am learning to cut my loss early if I am wrong footed, usually this means within the next hour or close out my trade before the close. Cash is safer with me than parked on a stock in this volatile market environment. Increasingly many are talking of a market tipping over and heading south. For most fund managers, the reality is there is really no other place to park client's money if their mandate is to stay mostly invested (and doing with much trepidation) and as such equities are marching on at relentless pace. However, lately we are beginning to see signs of cracks.

I keep reminding myself that trading is simple, there is no need to over complicate one's trading strategies. Get out of something that is not working, has not worked, and stick with what works and has worked in the past. I have a handful of biotech and drug recovery companies I buy (and Sell) and that is working right now and I thank my lucky stars. I also own individual small miners as proxy to SLW, GDX and their underlying ETFs (SLV, GLD). I have been able to profit from these smaller names trading alongside the bigger names. I am still selling puts and calls to balance the volatility on my portfolio. The last few months, I tried to profit off short term momentum of a stock candidate. I am not buying any blue chips or utilities or any other hot shot that are all sitting at 52 week high. When the market crushes, I will have my pickings there.

If you are looking for a good book on the HFTs, read this book Dark Pools: The Rise of the Machine Traders and the Rigging of the U.S. Stock Market

Good luck trading