New Year's Trading

Hello Everyone,

Confession time... I haven't been diligent about this blog as I wanted to. So my new year's resolution is to devote more time to this. My reasoning is mainly to force myself to follow my rules more strict. Last year I entered a lot of positions that were sometimes profitable, but not always correct as far as my system goes. I finished the year with am 11.18% gain. While thats respectable, I could have done better had I followed my own rules. Not following my rules has me in my position in ERX, the 3X Energy Bull ETF.

I still like my position, but I just would have been waiting still to enter. I entered the position at $24.00, which puts me down about 2.4%. The reasoning for waiting on this position is that at this time I'm not sure if the energy sector will continue lower, or is forming a bottom. I like to see confirmation before I enter. But here we are.

 

Above is a daily chart of XLE, which is what I use to determine entries and exits.  We see a potential bottom forming, but it isnt verified yet. Being that we're in a downtrend, it isnt safe to enter a long position until a new uptrend is confirmed. 

The chart about is a 15 minute XLE chart. I included this to show the level I would have needed to see broken to normally enter my long position. We came close to this level, but did not break it. The new level is not the most recent high, or about $62.30.

I generally do not speculate on issues that could change these trends. Frankly, it's irrelevant to me. I simply wait until conditions are met and enter positions. This post is not as detailed as future posts will be, but considering I entered the position by not following my rules, there isn't much to say. We just wait until the position is verified.

I intend to post entries and exits to Twitter, so please follow if you're interested in the positions. I will then post a new blog at each position change giving my reasoning the following evening. I hope you enjoyed this, and will come back in the future.

TraderSchmo