Meta-Trader - A Downhill Slide

Welcome back Meta-Traders.

This past week was ugly in world markets and it was capped off by Friday's -2% plunge in the major indices.

Leading the parade lower was IBM which noted mixed results on "disappointing revenue".  The stock gapped down -2.5% on the next day's open and has given back nearly 10% since.  Then on Thursday Google accidentally released (disappointing) earnings early and the stock lost about 50 points or 7% in a matter of minutes before the stock could be halted.  Even technology giant Apple has been in a steady downtrend and has sold off nearly 12% from its recent all-time high set less than a month ago.

Keep in mind that its October and this type of sell-off is typical for this time of the year.  In fact, this Friday was the 25-year anniversary of the October 1987 stock market sell off.  I went into October (and September also) with a high cash position, so most of this years profits have already been booked.

The only exception was AAPL which I rode down all the way from the top, although only with a small number of shares.   There's some indication that results could be constrained by supply issues with the iPhone 5 which otherwise has been a runaway hit.  This coming week is going to be an exciting one for Apple shareholders with a press event on Thursday when they are expected to release the iPad Mini (dubbed the Amazon Kindle killer).  Also, Apple earnings are due for release after hours on Thursday which should make for some fireworks.

And speaking of disappointments, Automated Forex Trading has continued its disastrous slide with fresh equity lows in every system.  My Atinalla custom account just crossed down 50% from the account opening.    I recently tried a different set of parameters on USD/CHF which have been profitable year to date, but not profitable historically.   That change only accelerated the slide with 2 large losers and one smaller winner.  I'm taking Daniel's advice and stopping my USD/CHF instances in my remaining systems.

Professional Trader Dan Zanger once said that all stocks are bad, and they are only good when they are going up.   I think the same can be said of Forex systems as well.  I think us Asirikuy members have been schooled into thinking we have to sit through long periods of draw down, but I don't think any professional traders (except maybe mutual fund managers) operate like that.  Profits have to be realized, captured and protected, otherwise the market will take them away just as sure as it gave them to you in the first place.

I think the next few weeks are going to have some great opportunities to day-trade options.  Protect your profits and keep your position size small until the market tips its hand on direction.  Then go in for the kill.

Have a great week.