Posted on Apr 7 2015 - 9:00am by Sharpe Trade

I don’t play chess with any level of skill.

Yes, I know how the pieces move.   A few basic opens.  That’s about it.  So that being said, I once took some time and had a 1900 rated friend ‘showing me the ropes’ of the game.  He’d walk me through various games. Various ‘opens’. Different ‘end-games’.  Well, in the middle of one of these sessions, I had moved my bishop out into the middle of the board, and was quickly trapped.

I sat there for about 5 minutes trying to figure out how to extricate myself.

When he finally leaned forward and said …

You know Dan, he can move back where he came from too


Quite simple.  Just have return the bishop to his original starting point, and the entire ‘trap’ was non-existent.  It struck me how simple the solution was.  I just couldn’t see it.

The markets are not very different.

As I said previously, I think we have a complete meat-grinder on our hands.  Yesterday, my edge favored the downside.  We then rally a bagillion points, and now, my edge is totally and completely mixed.   I have no edge in this market. However, as I said some time ago … we’ve gone completely defensive in this meat-grinder.  Especially since this market has completely chopped me up earlier in the year, and had me hit my draw-down kill-switch (which, by the way, is very, very low compared to other professionals)

I know when it’s time to pull the pieces back.

I’ve simply put on a strategy that will make money in any situation.  The market goes up?  I make money.  The market goes down?  I make money.  It will allow me both to recoup some of the losses I had earlier in the year, and at the same time, wait out this meat-grinder

I’m playing defense.

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