“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 way to overcome it)…
The problem with news related gaps, specifically ones as steep as this one, is that there isn’t a whole lot you can do about it after the fact. Most of the preparation comes in the form of lightening up, hedging, or learning short-term time frame trading. Again, my favorite way to manage intraday trades in this type of market environment is either trading butterflies, buying long puts in the indexes like in SPY and QQQ, or day trading ES or NQ futures.
In this situation you’re either…
- Very long wondering what hit you
- Holding a mix of longs and shorts that are doing alright
- Short and very happy
- Flat and happy
- Wondering why you’re putting yourself through this volatility
Regardless of which one, knowing how to read price action, knowing how to read market internals, and knowing when to jump back on the horse is absolutely critical. Again, that’s why I created Phoenix to begin with. Phoenix will tell me when it’s time to get back on the horse.
But that time hasn’t occurred yet.
So, I reflect. For me, I’m sitting steady at number two, with a mix of a few longs (after lightening up quite a bit the last few weeks), but I can’t deny the ‘wondering why I put myself through this’ thought. Especially on days where the S&P is down 2% on market open.
Trading isn’t easy — and I’m not going to tell you it is, but it’s a skill that can be taught. That skill then one day turns into intuition. I took classes, listened to the trading room, attended live events — and in the beginning, one of my first points of curiosity was how I’d ever be able to ‘read’ the market.
Now I’m here, so I’m going to take you on a stroll down memory lane to really show you… if I can do it, then you can do it.
One of my favorite quotes from my friend and trading partner Henry Gambell when traders complain on down days is, “If you want to make money trading every single day then go work construction” (or any job where you’re paid an hourly wage, and you know exactly what you’re taking home). With trading, we have the opportunity to maximize returns, while also accepting that many days the market won’t behave as we’d prefer.
So, on a volatile day, I sit back and I think about how my life was seven years ago — before I was a trader. I made the very large mistake of thinking I could depend on someone else, and that I didn’t *need* to make more than a teacher’s wage. I was trapped, facing a short list of choices… none of which were appealing.
I knew I had to make a change. I didn’t know where it would lead, or how long it would take.
Here I am seven years later, with a crazy schedule, doing market analysis here, in our trading room, on Youtube, and managing my very busy radio and tv schedule.
And this is my reason for I doing it: my son, Leo.
Here’s Leo and I, after his pre-school graduation. (Pre-school — something else I couldn’t afford several years ago.)
I don’t know about you, but if you’re anything like me, before children, I was almost a completely different person. I loved being free, travelling, living a very minimalist life-style. I rode my bike everywhere and loved my waitressing job where I got to meet different people every night. I didn’t have the latest smartphone, and I didn’t care that my income barely covered my basic needs.
That all changes when you have someone else you’re fully responsible for. Now, because of my trading and education, I’m able to not only give my child the necessities, but also show him my love for travelling, puppies, and getting fun things (like legos and slip n’ slides).
They say money doesn’t buy happiness, but it sure does give you security and comfort — and I don’t know about you, but for me that opens up the doors of opportunity.
So, when times are hairy, don’t forget why you’re here. What is your reason why?
P.S. If you need a place to start, check out my Phoenix class. This is my all encompassing, stock picking class that’s the best summary of my selection process out there I’ve compiled. Check it out here.