1. Market commentators say money’s going to be made by anyone who goes long volatility. You decide it’s time to:
Find out what “going long volatility” means. | |
Look in the atlas. You know where Long Island is, but you’re not sure about Long Volatility. | |
Ignore them. | |
Sell options. |
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Buy options. | |
2. Tomorrow is your birthday and you’re feeling good. To celebrate your birthday, you’re going to:
Buy of copy of How I make a million bucks a day without really trying by trading the Bolivian Corn Exchange by S. Nakeoil | |
Buy a copy of Reminiscences of a Stock Operator. It’s time you found out what all the fuss is about. | |
Write How I make a million bucks a day without really trying by trading the Peruvian Corn Exchange. | |
Run some computer simulations of your new trading model. |
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Day trade and use the profits to buy yourself a spectacular birthday present. | |
3. It’s vacation time. You’re on a tropical island and a street vendor offers you a bag of peanuts for 50c. You:
I’m too busy trading for vacations. | |
Buy the nuts for 50c. | |
Force the guy down to 25c – these vendors are always pushing their luck. | |
Force the guy down to 25c and sell him a copy of How I make a million bucks a day without really trying trading the Bolivian Corn Exchange for twice the cover price. | |
Offer him $1 and tell him to keep the change. | |
4. Selling short is inherently riskier than going long because:
If the trade moves against you, your position size rises instead of falling. | |
Short-term trading is riskier than long-term investing. |
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Jesse Livermore was famous for short selling. | |
Nobody likes to get the short straw. | |
Futures markets are invariably hedged against short positions in overseas commodities. | |
5. The 3-6-3 rule is:
An old saying about banks – 3 percent interest is paid on savings accounts, 6 percent is charged on loans and the bankers are on the golf course by 3pm. | |
A rule of thumb from the nineteen-twenties for trading the bull market. Go short 3 days, long 6 days, then exit the market for 3 days. | |
A publisher’s rule for writing stock trading books. 3 chapters of well-worn market history, 6 chapters of statistically insignificant evidence and 3 chapters of sales blurb. | |
One of Jesse Livermore’s favorite rules for pyramiding into a stock. | |
An old saying about stockbrokers before internet trading – 3 percent fees on the purchase, 6 percent interest on margin, and 3 percent fees on the sale equals 363 days a year of good living. (No-one seems to know what happened on the other days.) | |
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Your answers reveal you are probably: |
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Check out what sort of trader you are on Spot the Sucker.
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