Trade The Journey

Trade The Journey

What a time to be Alive!

Greetings! I hope this post reaches you in good health and in a positive spirit. ‘

With all the turmoil, it may be hard to remain positive and hold onto your dreams. The only things that we truly own are our thoughts and actions. “This too shall pass” is what my mother tells me when I become impatient.

At every turn, I am unsure of which news event will be the final straw for the market to reflect the current reality. I am deeply concerned about race relations in this country. The leadership in this country is nonexistent and mainly concerned with maintaining economic advancement.

The only problem with the current strategy of economic achievement is that the US economy is driven by consumer sentiment. How do consumers feel as they increase their discretionary and credit limits?

Or is saving a priority because the road ahead looks questionable?

The vast majority of the current advancement is due to Federal Reserve participation. Landlords, both residential and commercial, are unable to collect income and, in most cases, force a foreclosure. Unemployment payments include an extra $600 on top of the regular amount. Fears of a second wave of the Coronavirus is beginning to damper the hopes of a quick recovery.

Many think that the US economy cannot afford another shutdown. Another shutdown would force the government and federal reserve to use all their tools available to backstop the US economy. The healthcare system already weakened would come close to destruction if a second wave occurred. With all this going on, protesters line the streets with a simple message that black lives matter.

Often taken out of context, black lives matters’ message is simple, “Our lives matter too.” Equality in mind, action, and opportunity is the new requirement.

 

So how can someone prepare for further volatility?

For me, the sidelines isn’t an option, so I have to be prepared by completing my due diligence. Luckily, I’ve been learning how to conduct proper fundamental analysis. I have to admit learning fundamental analysis requires a different skill set than technical analysis.

Fundamental analysis requires foresight and critically thinking about market valuation. This type of analysis is more conducive to investing or swing trading.

Technical analysis requires pattern recognition and the ability to make quick decisions. Waiting can sink the ship when trading. You have to be a decision-maker in the trading arena without regard to your previous position.

Some are reading this and probably thinking that both strategies can be used interchangeably when trading or investing. In investing, fundamental analysis plays more of a dominant role. In trading, your ability to recognize patterns and market sentiment from period to period is crucial to your success.

I like to use fundamental and technical analysis together. Together they give me a sense of how the company would be valued in a fair value environment. Some don’t have the patience to perform an in-depth analysis of a company and its market. Others find trading using technical analysis more exciting and profitable.

The great thing about becoming successful in the markets is that no strategy will work better than the one that works for you. Talk to one-hundred traders and investors, and you’ll most likely hear a hundred different ways to make money.

A new challenge for me is preparing for each trade and three different scenarios. Tonight will mark the first night where I will plan my trade for tomorrow. My goal is to develop a system for each trading day, assuming I have to work the following day.

I will develop three scenarios for each trading day, an entry and exit point, and the risk I am willing to bear. I will add each day of preparation to the trading journal on this site. This journal will include the profit/loss of each trade to keep me accountable.

Honestly, I thought the trading part would be more natural since I acquired experience virtual trading. Nothing replaces the feeling of trading with money on the line. The thought of losing money adds the element of fear to the equation. Fear overrides the conscious thought, and in a split second, your intelligence is rendered null and void.

Emotions come into play when trading a live account. Mastering your emotions is one requirement you must complete before becoming a Master Trader. Another aspect of trading I am learning is that your first mind is the right mind.

I’ve exited a trade more than once on nothing more than feeling or a hunch that the stock would fall. The stock would continue to advance, and I’d reopen the position. After reopening the position, the stock would climb a bit further and then drop. My first mind was the right mind.

Most of the short-term trades I’ve made recently are in good companies with either solid fundamentals or have opportunities for capitalizing on the next major trend.

In the current market, you have to be extremely careful. The market is built mostly on sentiment, and all it takes is a massive shift in sentiment to wipe out market gains and retirement accounts.


This past week:

This past week was more of the same. I’ve been saving and investing with a purpose due to a shaky economic climate. Unemployment remains high, and I am doubtful if some jobs will return.

No one knows what will happen next. I want to be able to capitalize on whatever situation will occur. To do this, I have to remain up to date on domestic and international events. It’s a hard job to consistently complete daily, but someone has to become wealthy. It might as well be you.

This past week deserves the grade of a “C+“.

Leave a Comment

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