Thursday, November 17, 2011

Natural gas saved my day... or the power of diversification

If it wasn't for a very profitable natgas long position (btw that I opened seconds before the release of the weekly EIA injections number. Call me lucky here.), I would have ended up my day of work in the red. Almost all of the other transactions I made were losers. This, I believe, illustrates the importance of diversification when trading for a living. I know some people will disagree with me on that saying that specialization in one particular market is more profitable, but from my experience it certainly wasn't. Each trader is of course unique and operates more efficiently I am sure when adopting a style that suits his/her personality. Mine is "diversify and you will win more constantly". Sometimes, I have to admit, a little luck is helpful. But this aspect of trading probably evens out over a certain period of time. So, all-in-all, another winning day with a net result of +$300 (trading 1 contract, commissions included). Details below.

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