Trade The Journey

Trade The Journey

First Trading Seminar

Top of the Morning. I hope all is well and everyone is feeling refreshed for the week ahead. Last week is a bit of a blur when it comes to the Economic review side. Nearly all of the indices closed below their 50 simple moving averages except for the Russell 2000.

It looks like S&P 500, Nasdaq, and Dow may be headed towards its 200 sma. Interestingly, cryptocurrencies began to trend upward at the end of last week.

The Russell 2000 has been a sideways trend for months and barely closed above its 50 sma. Worries about the debt ceiling, labor shortages, and supply crunches have been the primary market issues. The infrastructure bill hasn’t been passed, and neither have the accessory bills for more spending plans.

The VIX and VXN both spiked up during the beginning of the week but retreated towards the end of the week. The VXD remained in a sideways trend.

Inflation is also a concern due to some of the factors listed above. While I am out and about, I can see the shortages in products available and increased prices in stores in the city. With the holidays upon us, how will consumer demand be affected by the supply shortages?

The Evergrande debt crisis looms large on the Market even if it fell to the background in the latter part of the week. Central banks have already questioned wall street banks about their exposure to Evergrande debt.

Evergrande is one of China’s largest developers, and the question everyone has is this situation China’s version of “Too Big to Fail”?

Its employees and citizens hold Evergrande’s debt as they borrowed to expand and keep afloat. Real Estate in China makes up about 17% of its GDP and is heavily invested in by its citizens. I believe they have over $300 billion in debt and have already started missing out on interest payments.

Another concern is the energy crisis which has already hit Europe and China especially. A coal shortage exists in China, and they have begun to import and produce coal at a lightning pace to avoid outages. I wonder how the energy shortage might affect America in the coming winter months.

Looking at the Charts:


 

Losing Trade Again:

AXP bear credit spread failed miserably. It was doomed from the start. I sold 162.5 call and brought the 165 call with the forecast of a slightly downward/neutral move in AXP. Didn’t happen, AXP went up several points nearing the high of $179.67.

When I realized the move down to my breakeven of $164.36 wasn’t going to happen I lost %100 of the option’s value. Below is the chart and my excel spreadsheet trading journal.

 


Linda and Damon Seminar:

Wednesday and Thursday of last week, I attended a trading seminar hosted by Linda Raschke and Damon Pavlatos. They offer a monthly membership that includes their nightly preparation and review and access to their trading screens and commentary during the day.

They are both well-known and highly respected in the trading community for their knowledge and experience.

I didn’t know what to expect. For two days, I attended the full seminar session from the Market open to Market close.

I’d say it was close to nine hours for each session. One hour before the Market opened, featured chart review and preparation. The remaining eight hours involved monitoring the Market and executing trades.

This was my first time sitting in front of the screen for the full trading session. The session was intense.

I was able to capture the sessions with a screen recorder.

Linda and Damon traded around reference levels and pockets. Watching Linda draw trendlines and identify small divergences using the 2/10 indicator was terrific. I got to see that they looked at the Market far differently than the average trader.

They weren’t forecasting or trying to predict what would happen in the future. They watched the market structure and how the Market moved around their reference levels to make decisions.

Towards the end of the second session, I got to see Damon place a short trade using his Market profile and volume-candlestick chart. He made the trade so effortlessly that I thought the trade was staged. To make a trade with that amount of ease and people watching made me realize I was watching a master at work.

He also wasn’t greedy. He set a reference for an opening short and a reference for closing. The S&P futures continued downward but he exited before the buyers came in and provided support.

It was almost like watching a lion stalk its prey, waiting for the right moment to place a trade based on the market technicals. Linda’s screen had the NYSE volume, the vix, and the tick chart. Damon mainly used the market profile and since he was trading the S&P futures, he had Europe and Asia indices on his Market profile chart as well.

Money is constantly flowing, and you could see the results when Europe closed around 8:30. The Asia markets open first, followed by the European markets, and the United States opens last. Before the markets open in the US, the sentiment and direction are partially determined by Asia and European markets.

The nightly sessions featured a market review and analysis. The last nightly session featured a PowerPoint presentation by trading coach Mandi Rafsendjani. She talked about traders taking responsibility for their trading losses as opportunities to move forward. She also addressed my dilemma of making bad trades due to my fear of not progressing quickly enough. Her response was straightforward, How do you know you are not progressing?

For some reason, the statement got me thinking. I’m constantly learning and trying to improve but I never take the time to assess where I am at or how far I’ve progressed.

I’m so interested in achieving my goal that I miss out on the opportunities to reflect. Reflection and rest were some of the critical tenets of her presentation.

I’m going to rewatch the trading session and PowerPoint by Mandi to make sure the material sinks in.


I’m in a cash-flow crunch again. Seems like there’s a new situation requiring payment every time I turn around. Such is life. After last week’s option loss, I had to put a halt to trading for this coming week. I will instead practice placing an options trade.

I did not save any money this past week.

Reason: I made some bad purchases knowing I’m facing a cash-flow crunch.

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