The Cash Trade Didn’t Last Long

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.

Continue reading “The Cash Trade Didn’t Last Long”

Notes & Quotes from #Stocktoberfest 2016

#Stocktoberfest 2016 is in the books. If you are a trader, investor, or fintech start-up founder, you couldn’t ask for a better venue or a more gracious host; and I challenge you to find  a more genuine group of finance professionals (and market enthusiasts)  than the @stocktwits community. It was an honor and a privilege to be included. I met smart people, heard stimulating ideas, and received personal advise from those that have taken all the lumps the market can deliver and stepped out of the ring winners. It was truly a great time!

Ok, without any further nostalgia, here are my notes & quotes from #Stocktoberfest 2016: Continue reading “Notes & Quotes from #Stocktoberfest 2016”

Losers Average Losers – $Study, Discipline, Plan, Process & Passion Win

One of my favorite trading books is Trend Following by Michael Covel. In that book Covel describes a hand written note hanging on the wall behind the desk of legendary trader Paul Tudor Jones. The note read, “Losers Average Losers.”

jones

The note was a reminder to Jones not to add to a losing position. I have come to embrace this philosophy as my experience with averaging down has rarely led to profit and almost always had negative impacts on opportunity cost. I have found that when a trade goes against me, the best thing to do is to sell it for a small loss and move on to another idea. Adding to positions that are in a downtrend turn small losses into large losses. With trading, keeping the losses small is key to Risk Management and leads to survival and profitability.

Continue reading “Losers Average Losers – $Study, Discipline, Plan, Process & Passion Win”