High Probability Trading Strategies

Feb. New housing starts down 22.5% from Jan. and 20.8% from a year ago. Includes multi-family and SFR. New building permits down 20.5% from a year ago.

New SFR sales down 16.9% in Feb. to the lowest level in over 50 years since the data has been gathered. The median price of new homes sold down 8.9% from a year ago.

Foreclosures are increasing in many regions. Banks have a huge inventory of foreclosed homes that have not been placed on the market. Many of the foreclosures are relatively new homes which should continue to depress new and resale homes for at least another 2-3 years (in my opinion).

The real estate industry is a big piece of the U.S. economic pie. I don’t believe much of a “recovery” is possible without a strong real estate market.

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I’ve received many emails over the past few weeks with questions and comments something like – do your trading strategies work in this volatile market? The insinuation is there are different strategies for more or less volatile markets.

Markets have not changed. Read More

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“An expert is a person who has made all the mistakes which can be made in a very narrow field” – Physicist Niels Bohr

No matter how much we read, listen and study in any field, including trading, we will make mistakes, lots of them. Trading is like any other business. The real skill and success only comes after a lot of experience. One of the great things about trading is, unlike most other businesses, no mistake should be very costly. Trading is a business where we can test our knowledge and strategies with very little capital.

I don’t know of any other business where the exact same strategy can be just as effectively tested with a few hundred dollars of capital as with a few million dollars. We can test the same strategy and gain the same learning experience with 100 shares or one futures contract or a mini Forex position as we can with a position 100 times as large. We can literally test just about any trade strategy with just risk a few 10’s of dollars.   Read More

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