For those readers that may be new to the blog, I tend towards high probability, low risk, low reward trades. The baseball analogy is someone that hits for average, vs. swinging for the fences. I may occasionally take a shot, but mostly I am happy with small gains.
For 2010 in round numbers:
SPY up 13%, GLD up 30%, TLT up 5%
My trading profits ranked SPY, TLT, GLD, so I didn't take full advantage of the run in GLD. Now I occasionally short as well as go long, so at least I didn't go short heavily in this mostly bullish year.
Rounding out a few more ETFs:
IWM up 25%, BND up 2%, SLV up an incredible 84%, unfortunately I don't trade SLV
The stock market year was mostly up, with the sudden and scary flash crash in April. Precious metals had their best year in a decade, which is amazing considering this is the 10th straight up year for gold. Bonds soared and then came back to Earth, ending the year with a modest gain.
For blog reported trades I show 64 wins, 5 losses, 2 breakeven trades. That may seem like a remarkable record, but considering that many of the trades have a 85% to 95% probability of success from the get go, it is about average. One change I made this year was very few stop losses. In 2008, stops saved my bacon. In 2010, stops were for the most part whipsaws.
It is dangerous to think that the coming year will be a replay of the 2010. That said, trends in motion have a power of their own. Sentiment is one of the more useful tools in trying to trade counter-trend. The popular press is often an indicator of public sentiment.
Predictions are mostly for entertainment. Someone telling me what they are doing in terms of buying, selling or hedging is more useful to me.
Long GLD, GDX, TBT
Short SPY
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