All Greased Up – Sefirot Freestyle Portfolio

Feeling anxious about my OIL trade. Lots of doubts and rationalisations entering my internal dialogue.

My brief is to outperform the S&P 500 on a risk adjusted basis. On this score I am seriously outperforming but we are early in the game so let’s not get ahead of ourselves. I should also add the goal is to outperform on a go forward basis, in other words I am not going to simply lock in the outperformance and buy the benchmark and then say I beat the index. To claim victory one needs to beat over a bunch of different starting times.

The question I am asking myself is, am I correct to be playing around in other asset classes instead of just timing the SPY? For the purposes of this mandate my answer has to be yes as I am trying to keep this portfolio similar to how I would manage other people’s money and in order for my style to work I need to look for uncorrelated and diverse multiple trading opportunities. Michael you should know trading as a one trick pony will hurt you.

Let’s get back to OIL, now that I am satisfied that it is appropriate be trading this instrument. The plain hard fact is that so far on this trade I have been wrong. I am trading the belief that the market has oversold this asset for a whole lot of reasons, primarily due to the fact that it carries so much geopolitical charge and is therefore so heavily discussed in the media and that its use affects every man in the street. This setup is absolutely typical of a herding feedback loop activated by a market complex. With all this said I am still wrong over the time frame observed. However my time frame for this trade is a lot longer than what has come to pass and the risk associated is well within my parameters so for now I need to let my EGO step aside and let it do its thing.

Message to self: try keep the ego related emotions of being correct in OIL out of the equation. Been correct means more dollars and improved performance in the trade, don’t allow that to make you think you are cleverer, wiser, more deserving or any other emotion than being blessed to have achieved your goal. In the same vein don’t allow the shadow to inflate on the negative aspects associated with been wrong. Being wrong doesn’t invalidate you as a competent skilled professional.

[if I was being truly transparent I would put on the table all the personal issues I am currently going through which might further explain my emotional reaction to the price action. For now I will hold back :).

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