Trade The Journey

Trade The Journey

Reflection VII

Top of the Afternoon. Most of the indexes fell from their highs while the VIX trended higher. The ten-year yield on treasury bonds seems to be trending up, while the five years moved slightly higher, and the thirty-year looked in range.

All of the future indices seem to be trending lower. The PPI was released last week and didn’t move the markets much, maybe because higher producer prices have been expected. The PPI numbers moved higher slightly and remained elevated. The CPI will be released this week.

The Federal Reserve released its beige book, which is the commentary and summary of the Federal Reserve Districts. I read the opening summary, and it was inline with what’s been reported in the news: Job openings at all-time highs, supply disruptions, labor shortages, and a pullback in activities like dining out, traveling, and tourism due to the delta variant.

The variant doesn’t seem to be hampering sporting events attendance. Stadiums are packed, and fans are cheering without most attendees wearing a mask. Many states are still struggling to contain the Delta variant.

The president has insisted that people protect themselves and others from the spread of the delta variant. Incensed that more people aren’t taking heed, he has decided to issue mandates requiring vaccination or weekly testing. He has proposed taxing companies that fail to enforce the mandate.

Will this encourage people to receive the vaccination or remain steadfast in their belief that vaccine is not a necessity. The coronavirus doesn’t seem to be going anywhere, anytime soon.

Countries are cycling between lockdowns and openings. Will there be another variant that overtakes the delta variant?

It looks to be inevitable.

With stimulus funds slowing and rising prices, and wages to compete, I wonder when the Federal Reserve will officially state the start of its tapering process. Companies have begun to issue bonds in mass quantities to take advantage of the low-rate environment.

I’m confused by what’s happening, so I will continue to remain cautious from now on.

What is a master trader? Is it a person who can predict the next move with certainty or the person that never loses?

I wound venture to say that it’s neither. Being that I am not a master trader, I can say with certainty what exactly motivates a master trader. I often think of a master trader as someone who has a vast working knowledge of market structure and environment. They enjoy the challenge of the market and making profitable trades.

I’ve read and experienced that all traders make mistakes and lose money, but the masters limit their losses. This is a known fact.

Sometimes, I fall into the trap of thinking that a Master Trader has to be all-knowing, but I now realize that’s not possible. The more I learn, the more I know I don’t know.

I thought by finishing the next book, I’d finally have a great understanding of the market. However, the process is slower than I anticipated. Some market concepts are easy for me to understand, and others have taken time, like GDP and purchasing power parity.

With each building block, I feel my understanding increasing because I am assessing the market environment better. Charts help but so does reading the latest news updates and tracking economic releases.

For me, the most challenging part has been developing a sense of what’s happening behind the latest market movements. There’s a reason for movement, even if the cause isn’t readily available. It may be the anticipation of tapering or investors sensing that economic growth is peaking.

I’d say I spend close to two hours daily reading about the current events happening around the world. I do this to get a sense of what event may affect the stock or option I am trading. Most would agree that the latest information is most likely factored into the stock price but I still like to know.

Another challenging aspect is being the first to realize something that the market hasn’t.

What’s going to happen next?

I don’t have a clue, and maybe I don’t have to know what will happen next. I just have to trade what is happening now.

Last week in Review:

Last week, I saw a credit increase of one point. I’m paying off my credit account and saving money. I still have some areas of my budget that need work, like spending spontaneously.

Grade: D
Reason: I made some terrible purchases during the week.

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