How did you like that huge reversal to the upside on Friday? Did you get caught shorting it? Did you end up BTFDing like there's no tomorrow? Hello and welcome to another wonderful post by Gavin.
At this point I don't care why we drop or pop anymore. Data or news are just excuses for big money to move the markets wherever they want. We are just insignificant little pods pretending to be sharks in an ocean full of great whites. This is what makes trading that much fun and treacherous at the same time. If you get too caught up in your position, you may end up losing money because you didn't become pragmatic.
I have to laugh though because after Thursday's mindraping I decided to take the night off. True enough both clients and twitter followers were shocked I wasn't trading. However, I guided clients that it is a short overnight and the levels to watch out for. I was more so interested in what happened with TSLA. I took the short @ 228 and of course saw it pop int he morning and waited for a better spot to cover for a minimal loss. I lost $15,000 at the US open. I took a step back, angry and frustrated, I had to reorient myself. I could just walk away or get back and do what I do best - TRADE.
I decided to get back in - moving forward rather than wallow in the past. This is the FIRST time I lost money from a TSLA event EVER. So in terms of win/loss ratios, this was a tiny blip but nonetheless waking up to being down a Honda Civic is not something I want either. I do know full well what I was getting into and I recognized the risks.
Anyways, I went back in - traded as best as I could to claw back some of those losses. Thank heavens for Mike (@MEQsense) and the Equity Sense team, they helped give me trade signals to go back long on the S&P 500 and stocks. I turned my losses around and even ended up making $25,000 today.
You don't get to where I am and this way of thinking by just reading books. I am where I am because I have been hardened by experience and all the mind-screwing this market does to you. The markets are always unpredictable and your job as a trader is to find the best strategy to tackle the markets every day.
Overall, as everyone was telling me I was no longer bullish - I think today proves to you that there are still buyers lying around in this market. We may get 20-30 point drops here and there, the overall trend is still bullish. Until Central Banks lose their influence, you really cannot ignore the fact that each time you short this market - some big central bank is waiting to kill your position.
I am not bullish. Bearishness is a principle not a way of trading. Pragmatism always outweighs personal emotions and biases. One must always take the most pragmatic approach to trading or one should prepare for the most epic account implosion ever.
by Gavin M.
I have been asked many times, "What kind of a trader are you?" It's a question to simple yet it takes a little bit more to answer. To those I simply have no time to spend I tell them this: "depends on what you're going for." What does that mean? Do you need $100 in the next few hours? Do you need $500 tomorrow or next week? Those are the kinds of questions you should be asking yourself to determine what kind of trading suits you.
I am primarily a daytrader. That is to say, I don't hold positions longer than 24-hours. I prefer instant gratification rather than wait for the trend to continue to take hold and make me money later. I can always join back in later. However, my kind of trading doesn't have to be your kind of trading. Just as I prefer to drive my Tundra doesn't mean you have to go all redneck and buy a truck. You might be a prius type of person. All I'm saying is your trading style is tied to your own personality and motivations.
The hardest thing to do as a market advisor is to provide ideas to clients for the immediate and medium term. Having a longer timeframe allows for more unforeseen circumstances to arise. If you are still surviving this low-volume market up to today, give yourself a pat on the back. This market is nowhere near its peak trading activity witnessed nearly 9 years ago where everyone wanted to be a daytrader.
The stock market is largely devoid of trading activity save for maybe a dozen or so stocks keeping it afloat. If you don't believe me, then you obviously are not an active trader. However, the absence of volume is not the same as the absence of volatility nor trading activity itself. It doesn't have to be. I'm no stranger to this low-volume environment and challenging as it may, it isn't impossible to trade. I pray that the time for when volume is close to zero never comes.
So going back to the topic at hand. When you ask others what kind of a trader they are. When you ask others whether they prefer short term or longer term, the answer always lies within your own goals. Some can't stand sitting in front of a computer screen for 4 hours a day. And yet, some, like myself, can be in front for almost the entire day without sleeping.
Some people make trading needlessly complicated because they want to cover all the bases and integrate as many techniques as possible. However, trading truly is as simple as asking yourself these two questions:
1. Do you want profits today or can you wait?
2. Do you have a plan for your trade?
Most of the time, when I see a trade setup, the time it takes for me to make up my mind and to press the Buy or Sell button is almost instantaneous. I don't try to overcomplicate everything with WHAT IF questions or AM I FORGETTING something questions. Trading is binary. Trading is about having a plan for an undertaking based on incomplete information. Some even say it is an act of faith.
The people who really struggle in this business are those who overthink and who hesitate. This Easter weekend, really think about how you view the markets. Think about how pointless overthinking something as manipulated as the markets. The majority want trading to be black and white but it is anything but that. Remember that the markets these days are now full of momentum-chasing robots. These are bots who could care less about fundamentals nor a sense of reality.
If you want further proof? Look at how the markets reacted to the bombings in Brussels. It took it right back up. So I say this in closing: why bother yourself overthinking a rigged market masquerading itself as a system actually based on economic merit? He who understands how the game is manipulated understands how to truly play the game.
Traders from Equity Sense will be writing on this blog on positions and other market-related things.