Like adapting to the weather… They always say, “Sell in May, and go away.” We hear phrases and sayings like this frequently. While we never know if they’ll come through, they’re good to keep in the back of your mind. Why? Because, to some extent, they can be a self-fulfilling prophecy. “Uh oh…it’s May! Sell in May and go away.” And then, selling begets more selling. Here’s why I’m telling you this (plus, a trade that’ll work in these market … Read more
The past two weeks, the movement in the stock market has largely been due to news announcements — President Trump’s tweets and escalating trade war rhetoric. Even though it’s now May 2019, and the stock market has essentially traded directly higher since December 26th, it wasn’t too long ago it seemed as though the sky was falling. Is this likely to happen again? If so, where do we go from there? How do we trade a 3 month decline? Should … Read more
“Never give up on a dream just because of the time it will take to accomplish it. The time will pass anyway.” – Earl Nightingale This past week has been the most volatile trading that we’ve seen in 2019. Today, to start the day off, we opened with an almost 500 point drop in the Dow due to overnight tariff news to continue the volatility we saw last week. Feeling hesitant about your motivation? Here’s the problem (and a mental … Read more
In the last edition, we discussed strategies to use to prepare for market pullbacks. Market pullbacks are just part of our reality as traders. For me, like I noted, I tend to stick with a swing trading approach and hold through a minor reversion to the mean. Typically, especially on a news related drop like we experienced this week, as long as the market is fundamentally strong, it usually resumes its trend within a few days. However, a normal reversion … Read more
On April 25th, in my Wrong in the Best Way episode, we talked about using Fibonacci extensions to determine when a market is too extended to the upside and needs to take a breath. While in this instance, the extended state of the market went on for seemingly forever, it’s still critical to know the market is extended… so you can take action, especially because you never know exactly which day the pullback will come. This Sunday, May 5th, as … Read more
On Friday, I was able to close out a butterfly for over 1200% profit. I bought it for $1.34 per contract, and sold it for $16.30. This is the type of lotto ticket type trade in which all of my experience and analysis came together, for the perfect trade. Whenever that happens, it’s critical to go back and analyze how it all came together. This starts with the very beginning (but stick around for the video down below)… After I … Read more
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CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY, SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.