This is not click bait to have you read yet another bearish article on the stock market. I am bearish, by the way, but that has nothing to do with this article.
Whether you manage large sums that are deeply invested in the market and hard to withdraw, or you are on a fixed income praying your assets don’t decline so you have to choose between a prescription and your utility bill, we seem to always be in fear of what awful things – random and unfair shocks – can happen to our money.
I’m talking quite plainly to folks in the middle – those who signed up to play this board game of stock and options trading. Whether long or short the market right now, you are taking risks, day after day, knowing with assurance you will be wrong, often, and yet you keep coming back to play at this game of risk. Ask yourself: Are you able to pull away from the drama and watch until it feels safer? Or are you confident that you are skilled enough to make money from this turbulence? To some, danger means opportunity. To others, it just means “Danger: get out!” Which are you?
We all live in fear about one thing or another. And right now we have lots to fear – in our global landscape and in our democracy and in ourselves, mostly in how we will react when we are impacted. As traders, you need to call up that self-awareness to decide if you want to engage (see above questions), and if you then voluntarily choose to play, then you must choose resiliency and calmness of spirit if you’re going to stay in this game. Notice I didn’t say “win this game”. I just said “stay in this game”.
Markets are choppy. They’re going to get a whole lot choppier. I don’t do trader psychology pieces because I think trading is such a personal experience and I don’t want to play your shrink.
I do have a compass which I share with my clients and those close to me that might help you navigate as well:
- Don’t ever risk more than you are willing to lose. Envision losing what you just risked and how that feels – and then fix it if it feels disempowering, awful, life changing. Don’t listen to anybody and don’t lie to yourself about that risk. Just ask yourself if you are fully prepared to accept the loss and feeling of loss of that which you are risking. And then remember these words: Don’t ever risk more than you are willing to lose!
- Trading is easy compared to life. We have all suffered losses – In trading and In life. Which hurt more? Yeah that. Keep trading in perspective For some it’s a job, for others passion, but suffering is optional, and manageable, if we remember the first rule of trading, and not so subtly of life:
Don’t ever risk more than you’re willing to lose.
I wish you every success in every way,
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At LaDucTrading, I analyze price patterns and intermarket relationships across stocks, commodities, currencies and interest rates. I develop macro investment themes to identify tactical trading opportunities and employ strategic technical analysis to deliver high conviction stock, sector and market calls. Through LIVE portfolio-tracking, across multiple time-frames, my real-time Trade Alerts via SMS/email frame my Thesis, Triggers, Time Frames, Trade Set-ups and Option Tactics. I selectively use Unusual Option Activity (UOA) and Deal Flow but no proprietary indicators – just solid chart pattern recognition, volatility insight and some big-picture perspective thrown in. Twitter: @SamanthaLaDuc