The last few days have been filled with noise. Trump took to Twitter and attacked Amazon $AMZN for not paying taxes, for allegedly having a below-market deal with the United States Postal Service, and for putting “mom & pop” shops out of business – 90 million American Prime members (and voters) be damned. As if that wasn’t enough to send the financial media into full-blown supposition mode, the administration announced proposed trade tariffs against China. Continue reading “Trump, Tariffs, Amazon, the 200 Day Moving Average and Your Process”
Yesterday I posted my watch list with a note that I was risking only .25%. That post led to the following question:
Losses are part of trading. In fact losing positions make up the majority of many winning trading systems. That is, many winning trading systems have a winning percentage that is less than 50%. It seems counter intuitive that you can be wrong more than you are right and still make significant money in markets. But that truth has been proven by many well known traders.
On November 8, I was 100% in cash. The market was lacking direction; my set-ups were not working, I couldn’t find an identifiable trend to trade, and the world was borderline psychotic about who should be the next U.S. President. This added up to uncertainty. Markets do not like uncertainty which was confirmed by my observations that breakouts were immediately retreating and not following through. Hence, I went to cash.
The truth is, I should have gone to cash much sooner. My set-ups had not been working for weeks due to the market chop. I even wrote an open letter to trading psychologist Dr. Brett Steenbarger about my inability to stay inactive. And he responded.