A reminder to dust yourself off

It’s times like these that are some of the most trying for us, as traders.

I’m not going to say the last week has been easy — as it hasn’t. We knew there was an upcoming Federal Reserve decision. And we knew they’d likely cut rates. We also know, as traders, these decisions cause volatility. As such, we remained largely flat, and waited to get long until after the Fed sell off was through.

That was great… until the unexpected happened…

President Trump’s renewed escalation of the trade war with China has sent chills throughout the market. It always seems impossible to deal with this type of thing. We cannot know what large, macro forces will come into play.

There’s always uncertainty around what we should do. Intense market reactions, like yesterday, cause intense despair. After all, one of the most important things John taught me was that you can see emotion in a chart. Consequently, you have to take YOUR emotion out of it, so you can see and feel what others are feeling.

On a day like yesterday, that was pure panic. Total emotion.

Investors are hitting the sell button without any thought other than to stop the pain. In moments like these, you have to remember that. You have to know that’s what’s happening. If you really need to cut losses, there isn’t anything wrong with that. But, at the same time, you have to remain objective.

How do you do that?

You look at your setups. And your levels.

I’ll tell you, in times like these, when extreme emotion takes over, we move away from the regular ebb and flow of the market. So just be aware of that. But you have to know…. after the storm, comes a rainbow.

When all the weak hands are shaken out, and everyone gets short — that sets up the stage for a quick rally. It never goes down forever. I take losses too. I’ve had a great run the past few months, but this week was not ideal. Part of getting past that is understanding that’s just how it goes sometimes.

The best defense, is position size and risk management to begin with. Never being over leveraged. You have to always imagine the worst can happen — while hoping it doesn’t.

There were many days like this in the beginning of my trading where I felt despair. Like many of the emails I’ve gotten this week. Henry always was there to cheer me back up, and tell me that this is just another day in the life of a trader. It makes you stronger and you’ll handle it better the next time around. I guarantee it.

And besides, if you want to make the same amount of money every day, you can go work somewhere else that has a set pay. In this life, we take risks for rewards. Some days, it doesn’t work out in our favor. But, we keep going, keep trying, and get better every single day because the reward at the end of this is financial literacy, independence, and a skill that can take you places you never imagined.

Seven years ago I was pregnant and in a situation where I was forced to leave my fiance to protect my son. Today, I just finished a live segment on Yahoo Finance and was on with Neil Cavuto on Fox Business for an hour. I know where this has brought me, and on those days that the market kicks me in the teeth — I remember why I’m here to begin with.

So, dust yourself off. We have a rally to nail.

6 thoughts on “A reminder to dust yourself off”

  1. Thanks Danielle. Sound advice. Wasn’t able to catch any of your on camera sessions live today. Sure do miss you in the trading room.

    Reply
    • Hey Mike –

      Thank you so much! I miss the trading room as well. You know, I have found that it’s better to do something 100% than split yourself 30/30/40 each way – then, nothing is done right.

      Normally I do the trading room while I travel, but this time I decided to focus my attention in NYC. I’ll be back tomorrow.

      I’ll also be posting my sessions in the ‘Media’ tab of the newsletter later this evening!

      Have a great day –

      Danielle

      Reply
    • Hey Jeannie –

      You’re welcome! It’s easy to get into a solid streak and forget that events like this happen. It’s hard but – it’s how it goes sometimes and it’s helpful to keep perspective and focus on the long-term goal!

      Have a great night –

      Danielle

      Reply
  2. Very reassuring words Danielle. My confidence level took a bit of a beating recently but I chalk it up to learning! Looking for the rainbow from here!

    Reply
    • Hey Kelly –

      I know how it feels! It’s always frustrating when your strong, technical setups are disrupted by ‘random’ news. We have to focus on the probabilities and it helps to know that the probabilities are usually in our favor – and, in times like these, it’s when it just plain doesn’t work out.

      Trading is never 100% and it helps to focus on probabilities and rules while understanding ‘black swan’ events can happen.

      Don’t give up!

      Danielle

      Reply

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