CHAPTER 7ON THE TRAIL OF THE ELUSIVE SECTOR

In the trading room at Momentus Securities, the competition is intense between Danny, Zoe, and Jack. Each month, they have two standing bets: $100 on who will make the most money trading that month and another $50 on who will have the smallest drawdown or loss on their worst trade.

What is so interesting about their competition is the different styles of trading that each has adopted. Danny is strictly a market trend trader. He hates bearing either industry- or company-specific risk. So Danny only speculates in cubes and spiders, that is, the exchange-traded fund QQQ that tracks the Nasdaq market and the SPY fund that tracks the S&P 500. If Danny thinks the market is heading up, he simply goes long ...

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