Trade The Journey

Trade The Journey

Hang in There!

Top of the Morning.

I hope all is well. I watch Bloomberg TV. Each day’s current events, don’t shock or surprise you,  it’s just more of the status quo. If you get this feeling, you’ve become desensitized.

Watching the occasional boxing or MMA event is typically the only television entertainment I receive.

Corruption, racial division, the virus, the economy, global relations, and the President monopolize the news station reporting. Sometimes I feel like this is some lousy movie on repeat, but it isn’t. Many around the world are beginning to question America’s standing and its future as a global power.

“If my small country can effectively decrease the Coronavirus infections quickly, then why can’t America? Is their decision making still sound? How likely is their stability and reign as a global power likely to continue?”

Our money, standard of living, and livelihood depend on the confidence held around the world in the United States’ ability to honor its debt. With the rapid rise in the amount of debt, I wonder who will pay the debt when it comes due. Of course, the debt repayers will be people who have the means to do so, i.e., the middle class and parts of the lower class.

Countries around the world want to hold China accountable in some form. The need for accountability is increasing as we near the election in November. China is growing by progressing in some areas like opening its financial markets, but they have also relied on their traditional means of enforcement in others. But how willing are they to sacrifice their economy to do so? There is talk to move supply chain production to other countries, but companies face significant restructuring costs in doing so.

With economies around the world still struggling to contain the Coronavirus, how likely is it companies have enough revenue to modify their supply chain?

Every major country has had to issue a debt package in many forms and for many industries.

I still have not made the transition to fully covering the retail, construction, and technology field.

I will.

The challenge I face is in convincing myself to stick to three industries/sectors. After selecting three sectors, I then have to narrow my focus on a select few companies which I’ve had trouble doing.

My focus tends to change on stocks of interest, which resemble the traits of a trader. However, I also like to look at the companies financial statements which lend itself to the traits of an investor. If I can somehow merge the two by trading in the correct timeframe, that could prove to be my holy grail trading system.

The five-minute timeframe is my preferred trading timeframe. It’s fast enough to reflect the movement of the day yet slow enough to allow some “slow” thinking. The fifteen-minute and thirty-minute charts are for guidance on the five-minute chart. It took me a while to see that the fifteen-minute chart represented the weekly action, and a thirty-minute chart described the price action for the last two weeks.

Some of the Master Traders I listen to recommend reading “Thinking fast and slow by Daniel Kahneman” to help you discover your trading style. Some people are better at thinking fast, others at thinking slow.

My preference seems to be thinking slow, with careful analysis. I continually return to swing trading. Swing trading gives me the freedom to reflect on the trade before I place the trade.

I keep my position size small to avoid any unnecessary stress as I continue to practice my entries and exits. I tend to keep positions open for one to two days. I also began keeping a journal to track my thoughts and emotions before and after a trade.

There’ve been times when I followed my rules and missed a winning trade. More often than not, when I break the rules, I lose. My rules are simple for swing trading; they include:

  1. Do your homework the night before or don’t trade
  2. Form three scenarios for price action
  3. Become somewhat familiar with companies operating, debt and cash flow position
  4. If the trade isn’t working exit and start anew.

Mostly, I’ve had losing trades with a couple of winners sprinkled in. The best trades for me continue to be the longer-term trades. These are trades that the market took time to value and fully appreciate. The significant stock advances in my account took close to a year to do so.

Learning to trade has been one of the hardest endeavors I have undertaken. Trading successfully is largely about your psychology when entering and exiting a trade. You’re required to be a sort of technical analysis savant. I would venture to say that if you aren’t passionate about trading, you’ll probably succumb to the stress and pressure.

Nailing down the process is the most important and most challenging aspect of trading. For the system or processes to work, you have to abide by its rules.

This past week in Review:

A few times during the week, I almost loosened the grip on my discretionary spending limit. A couple of items piqued my interest that was well within my price range. However, I remained firm.

I was tempted to purchase UFC 251, but luckily, I did not as the main event turned out to be a snoozefest. One fighter in the main event resorted to foot-stomping as a striking strategy. I’m sure he probably regrets the strategy because his chances of headlining a fight card without a big name have dwindled.

In these times, with all the uncertainty, its probably best to remain frugal.

A lot of families resolve will be tested during these trying times. I’m blessed to have a roof over my head and food in my stomach; some aren’t so lucky.

This past week deserves the grade of a “B.” Although there were a couple of slip-ups, all-in-all it was a good week.

This week I’ll be forming a plan on restructuring the site towards retail, construction, and technology. It should be interesting.

Leave a Comment

Your email address will not be published. Required fields are marked *