[You can skip ahead to our podcast on this same topic here]
Looking at this return for a trading system, you might surmise that this trading strategy was incredibly active.
The equity curve is too smooth to be from one stock. It must be a highly active strategy with tight risk management parameters to minimize the downside, right?
Well, you’d be almost right.
This is the return if one invested $10,000 in one idea per week since March 2020 following the #TradeIdeas Trade of the Week.
The Trade of the Week is a free weekly email that arrives in inboxes…
When all your options have been exhausted, make more options. There’s always something else you can do to keep going.
When the obvious solutions have failed, get more creative. You owe it to yourself, to the situation, to life, to find a way to make it work.
If what has always worked no longer works, experiment, adjust, adapt, learn. Get yourself curious enough and persistent enough to figure out what will get the job done.
One of the things I often repeat is: Options give me options.
And it’s true. An options trader has a number of…
I shared this tweet today which was a quote from author James Clear of the awesome book Atomic Habits:
… and it dovetails nicely with a discussion I had with one of my All Star Options clients recently.
In conversation, it was asked of me what I plan to do about a few positions we’re in that are currently losing money?
The positions in question are all defined risk positions and so my answer was that until our stop loss levels are hit, there is really nothing for us to do. The trade setup is still valid.
Over-caution is as bad as under-caution. Both are extremes to be guarded against. Life itself is filled with the element of chance.
~ Napoleon Hill, Think and Grow Rich
Thinking in terms of hedging, the above quote makes a lot of sense to trading and investing.
It’s obvious where not exercising at least a modicum of caution can be a recipe for disaster. If I’m not paying attention to my position sizing, stop loss levels, or proper execution techniques — then sooner or later it’s going to bite me.
Where it’s not as obvious is in the other extreme, where…
If you want better results, then forget about setting goals. Focus on your system instead.
~ James Clear, Atomic Habits
This is such a contradiction to so much I’ve read from just about every achievement-related book, article, or blog post. It is constantly beat into our heads: you must set goals!! You must have a vision!! You must set your mission!! And to some extent, I still do believe that.
Problem is, I find goal setting is very hard. Mostly because I can never fully convince myself that the goal is the right goal.
For example, if I set a…
In stillness you can hear yourself think. In stillness you can remember who you are.
In stillness you gain perspective. In stillness you connect to purpose.
As I’m winding down this week with the prospect of some upcoming vacation time filling my mind with thoughts of free time and frolic, this quote above from Mr. Marston reminds me that I don’t need to fill my days with frenetic high energy activities in order to get the most out of my vacation. Instead, I should be seeking opportunities to do less.
Seeking to do less has always been…
Again and again I learned that lack of equity was a leading cause of failure.
~ Phil Knight, Shoe Dog
It seems this is an issue not unique to the world of trading.
With big eyes and full hearts, we often try to bite off more than we can chew. I am 1000% guilty of this.
I’ve often felt I was undercapitalized. But here’s the thing about that: this feeling doesn’t change as you get more capital. Like “keeping up with the Joneses,” we’ll always find somebody who is trading with more and we’ll appear inadequate in comparison. This is…
Don’t worry about what the markets are going to do, worry about what you are going to do in response to the markets.
~ Passage from New Market Wizards, Jack Schwager
There are very few people in the U.S. that can look at the stock market performance since March and draw any rationalization for how it might make any sense.
The Virus. The Quarantine. The Job Market. The Ending of Unemployment Checks. The Rallies in the Streets. The Rioting in the Streets. The Government Ineptitude. The Social Unrest. The Local Militias. The Finger Pointing and Blaming. The Rising Infection Rates…
I also suggest that once every ninety days or so you take an hour to read your journal entries from that period. But don’t be overly focused on the details, like the budget meeting three weeks ago or last Thursday’s pasta dinner. Instead, focus on the broader patterns or trends. Capture the headline. Look for the lead in your day, your week, your life. Small, incremental changes are hard to see in the moment but over time can have a huge cumulative effect.
~ Greg McKeown, Essentialism
This is something I need to do.
Between this blog, as well as…
I think Pride holds me back.
I’m just riffing here, but its something that has been on my mind recently. When I look back upon my career, relationships (with people and money), education, and even sports, I think in many (if not all?) cases, I’ve been driven by a warped sense of Pride.
A Pride that seeks to express itself via an urge to scream: “I did that! I created that! I manifested this! All — By — My — Self. Look at me and how brilliant I am! I did this without anybody’s help! Aren’t I awesome and amazing?”