Trade The Journey

Trade The Journey

What do you see?

Top of the Morning. I hope everyone is in good health and spirits as the Coronavirus infection rate intensifies. The CDC asked people to forego their usual travel plans to help decrease the surge in infections, hospitalizations, and deaths. Some heeded the warning. Others kept their original plans and boarded the plane.

                                                                                   ♦

                                                It makes you wonder about the future of America.

As one of the most advanced and capitalized countries in the modern world, we seem unable to follow simple rules for our fellow citizens’ safety. People have continued their usual activities, refusing to believe that the Coronavirus is real.

While dying, some patients continued to voice their opinion on the falsities of the Coronavirus.  “It’s a hoax” they screamed as they struggled to breathe.  In their final moments, they clung to a belief that comforted them instead of a reality that betrayed them.

While the country awaits a stimulus, the treasury department thought it best the Federal Reserve cut some of its lending facilities and return the unused money. This money was available as a backstop for these uncertain times that the Federal Reserve could use. In times like these, every hurdle or barrier increases the chances of a slower recovery than expected.

With many states returning old lockdown measures, people are beginning to become fearful. When will this end? To take away one of the Fed’s available tools seems to be shortsighted.


 

Volatility is a good thing for the aspiring and experienced trader. Larger movements mean better opportunities for profits.

I didn’t place a trade this past week because it was the week the company I trade was reporting earnings. Looking at both sides, the amounts of calls and puts were reasonably equal. However, most were bullish due to the slightly higher amount of calls.

 

Earnings exceeded expectations, and the stock made a new high.

The stock opened near the close of the previous day. It peaked at the middle of the day and returned near the open at the day’s close. On the daily chart, this movement appeared as a doji. A scenario of eager buyers hoping to capitalize on the stock’s upward trend due to a surprise increase in earnings came and some left.

However, the primary trend is still bullish, so opportunities to catch the trend’s upside are still available. Astute traders will play both sides of the market.

Everything in trading is based on your best guess. Your interpretation of the stock chart and patterns is mainly subjective. You may be seeing what others are seeing, but the trick is to see a little beyond what others see. Patterns clearly observable to you, are observable to others as well.

The indicators are derived from price, which means they lag price. Everything is set for the professionals to take your money from you. When I read about the master traders, I notice they speak of foresight. Not in the sense of making wild predictions but in using experience to make probable estimates.

If this stock pattern forms as expected, I can reasonably expect these scenarios to occur. One of the scenarios is an exit strategy, if I’m wrong. “If I’m wrong?” is a statement that should never stray too far from your consciousness.

Skullduggery is apart of trading.

If everybody got the best deal, there’d be no reason to trade.

What you see is dependant on your experience, foresight, skill level, and belief. When I first started trading, I’d review the charts and struggle to identify any signals; I was lost.

Now, I can spend close to an hour identifying irregularities, reference points, trend lines, and support & resistance levels. The goal isn’t to make the perfect trade or find a system incapable of losing.

The goal is to protect me and my capital so that I can continue to trade. Nothing is more important than preserving your capital.


This past week:

Our greatest foe can be the reflection in the mirror. Its been close to four years since I began this journey, and I continually find myself revisiting the basics of saving and investing. There are so many ways to view a situation and experience; we can find two or three perspectives to confirm what we want to see.

Mastering the basics of saving and investing enables me the luxury of learning how to trade. It does mean sacrifice and hard work, but that’s part of the game.

I finally achieved my goal of eating out once a week. I’m proud of this; nothing entices my salivary glands more than a few slices of pizza. For so long, I rationalized eating out as a reward for hard work or an exclamation point to a great day. Small numbers add up.

It will always be difficult to maintain beliefs that counter the norm, like eating at home, saving what you earn, and starting your own business.

But it’s worth it.

My grade for the week: “B

⊕ Continued Improvement, reduced discretionary expenses, and credit reduction.

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