14 August 2008

Keeping fingers away from Investment account

One of the reasons why I write this thing here now, is to keep me accountable and help me have some discipline :-)

So what's the problem?

The problem is that I got margin call when Silver was somewhere around 14.44 USD. Now in couple of last days it has gone up to 14.86... So I decided not use anymore strategy called buy and pray or wait and lose :-p

But in the back of my head my Little Voice is still telling "Jump in" or "Get an new position, because otherwise you will miss out the opportunity." etc.

So I decided that my strategy is:
  • Buy when Silver price goes over 14-day moving average. And where I look this information is http://www.lbma.org.uk/ and based on that create my own graph.
  • Sell when Silver price goes under 14-day moving average.

And I will change the strategy after Silver price will go over 200-day moving average.
In this point the strategy will be:
  • Buy when Silver price goes over 200-day moving average. (This last happened 9/20/2007)
  • Sell when Silver price goes under 200-day moving average. (This last happened 8/5/2008)

So in the end I will not have many buying/selling going on... and for selling probably I can put a Stop in place. I now found out how I could do that... I just need to try it out, how it works in real environment.

Last thing: I will continue with futures. The main thing why I like the futures is that gain or loss is accounted every day. So I can't hide myself somewhere and "decide" in some point that now I'm going to be a long-term investor, when my actual idea was to be a short term speculator.
The second point is that when things will go as planned and I create some money out of this strategy I can start removing the money from investing account and move it into other deals.