Trader Style Quiz, from anonymous

November 25, 2015 |

 Trader Style Quiz.

Let's say that Crude Oil futures spike to the high $40's/low 50's/barrel and stay around there for a week or two. The explanation is geopolitical fears. The very front of the crude curve flattens a bit but holds most of the contango.

And let's say that you were flat crude going into this move.

Do you: (a) Enter some sort of bullish crude position after the move? (b) Enter some sort of bearish crude position after the move? (c) Buy or sell energy stocks after the move? (d) Do nothing.

Your answer to this question tells more about your views about trend following, reversion, and personal style than anything else.

Charles Pennington writes: 

I'll go with d.

Rocky's least favorite answer is a) because 1) even after a move up to 50, there's still a downtrend over the trailing year or so, and 2) he bothers to mention that the curve still "holds most of the contango".

d is the answer because laymen never make any money trading commodities. They should take any remaining money and buy the Vanguard STAR Fund.


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