| Is Bitcoin Killing Commodity Prices? Here's How to Beat the Pain... | | By Dr. Steve Sjuggerud | | Monday, December 11, 2017 |
| Is the speculative money that's going into bitcoin coming out of commodities? It sure feels like it.
Last week, in my True Wealth newsletter, we hit our stops on commodities ranging from precious metals to cocoa – taking some small gains and small losses along the way.
Whether you are trading commodities or bitcoin, I urge you to use stop losses...
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In short, before you enter any trade, you need to decide on the maximum amount that you are willing to give back – and you want to set that number up front and unemotionally.
Here are a couple examples from the trades we stopped out of recently...
Platinum hit a new low for 2017 last week. I recommended buying platinum in True Wealth earlier this year through the ETFS Physical Platinum Fund (PPLT). But I set a tight stop loss. We hit that hard stop on Thursday for a loss of about 3.6% on the trade.
We also hit our trailing stop on cocoa last week. I recommended buying cocoa through the iPath Bloomberg Cocoa Subindex Total Return ETN (NIB), and I set a 10% trailing stop when we entered the trade. Since cocoa went up after my initial recommendation (and since trailing stops rise along with your stocks), we ended up exiting this trade with a gain around 4.1%.
The important lesson is, I got these two trades wrong – but it didn't hurt me too badly. I stopped out before my losses got too big. I can easily live to fight (or trade) another day. No sweat.
What is your point of maximum pain?
What will you do when you get a trade wrong?
How much pain are you willing to take?
This applies to all your trades... especially on speculative assets like bitcoin.
What? You own bitcoin and you haven't decided your point of maximum pain? What are you thinking?
How much of your money are you willing to lose? It's real money.
Are you willing to lose 25%? 50%? 75%? 90%? All of it?
You need to decide this number – in advance – and stick to it.
I explained last week what I look for in a trade... I make sure the upside potential is dramatically larger than the downside risk I'm taking.
I strongly urge you to do the same.
Many commodity prices have hit new lows this year, while bitcoin has soared.
My losses in commodities don't worry me, though... because I set my downside risk so low.
What about you? What's your plan? How much money are you willing to lose?
Figure it out – in advance. Then stick to it.
Good investing,
Steve
P.S. If you're a True Wealth subscriber, we'll cover these two stop outs again in our issue this week. Remember, as we always say, it's important to mind your stops. And if your stop is triggered, sell the next day. |
NEW HIGHS OF NOTE LAST WEEK World Wrestling Entertainment (WWE)... sports media Twenty-First Century Fox (FOXA)... entertainment Six Flags Entertainment (SIX)... amusement parks Monster Beverage (MNST)... energy drinks Shake Shack (SHAK)... fast food McDonald's (MCD)... fast food Dunkin' Brands (DNKN)... coffee and donuts Bloomin' Brands (BLMN)... chain restaurants Sysco (SYY)... food products U.S. Foods (USFD)... food products Blue Buffalo Pet Products (BUFF)... high-quality pet food Clorox (CLX)... consumer goods RH (RH)... home furnishings Dollar General (DG)... discount retailer Dollar Tree (DLTR)... discount retailer Ollie's Bargain Outlet (OLLI)... discount retailer Five Below (FIVE)... discount retailer Carter's (CRI)... kids clothing Etsy (ETSY)... online marketplace Interactive Brokers (IBKR)... online brokerage LendingTree (TREE)... online lending Paychex (PAYX)... payroll processor Wells Fargo (WFC)... banks Progressive (PGR)... insurance United Rentals (URI)... equipment rental Waste Management (WM)... trash and recycling
NEW LOWS OF NOTE LAST WEEK GlaxoSmithKline (GSK)... pharmaceuticals Frontline (FRO)... oil shipping Coeur Mining (CDE)... precious metals Eldorado Gold (EGO)... precious metals Hecla Mining (HL)... precious metals |
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| Capture potential triple-digit gains, while limiting your downside risk... I believe we are in the "Melt Up" phase of this historic bull market. It's the last major rally in stocks before it all comes crashing down. And triple-digit gains are possible in this sector from here... Click here to get immediate access. |
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| The Fastest Way to Grow Rich... And Not Risk Everything Else | | By Mark Ford | | Friday, December 8, 2017 |
| | When I was 33, I decided to become rich. And I made that my supreme and overriding goal... |
| | 99% of Investors Don't Do This... Here's How to Be the 1% | | By Dr. Steve Sjuggerud | | Thursday, December 7, 2017 |
| | The setup was perfect for one particular trade last month – so we pulled the trigger in my True Wealth newsletter... |
| | You'll Want to Own This When Today's Bubble Implodes | | By Porter Stansberry | | Wednesday, December 6, 2017 |
| | It's a familiar story to anyone who knows much about financial history... |
| | 'Melt Up' Update: ALL CLEAR Again | | By Dr. Steve Sjuggerud | | Tuesday, December 5, 2017 |
| | I'm watching five specific early warning indicators for the "Melt Up" – the last explosive stage of this bull market. These indicators will let me know in advance when the Melt Up is on its last legs... |
| | Join Me at the Stansberry Winter Conference | | By Dr. Steve Sjuggerud | | Monday, December 4, 2017 |
| | I can't wait... We'll meet the world's best investing minds... and we'll have a ton of fun together. |
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