Breaking through the fog of trading

One thing about trading:

It forces you to try and succeed while walking through the fog of the unknown.

Because I come from the entrepreneur world, I see a lot of business owners who try to find success by meticulously planning out every detail of their business steps and then trying to follow them. Except they forget the wisdom from Mike Tyson:

“Everybody’s got a plan until they get punched in the mouth.”

Military strategists say the same thing a different way:

“No plan survives first contact with the enemy.”

The reality is, no matter how hard we think things through, as soon as we take the first step to execute our plan, everything changes.

Things fail. Things succeed. New things bump up in priority and others fall down (or fall off the list altogether).

Trading success is sort of like walking a light trail in a foggy forest. You can see the immediate steps ahead, but don’t see the destination. The decision becomes whether you wait for the sun to burn out all the fog so you can see the end destination (newsflash: not gonna happen in a forest) or you can take one step and see a little bit further.

The only way through is one step at a time.

Here's what the stocks' rally needs to keep the party going.

Why it matters …

From the article…

“Part of understanding why market optimism seems to be winning out — despite the factors weighing against it — is the timeline experts and investors are using to derive their optimism. It isn't just the muscular corporate results expected for the rest of the year that are powering lofty expectations. Projected returns for 2026 and even 2027 are driving the growth story too, with AI efficiencies and a more dovish Fed boosting corporate fundamentals.”

I’ve got to say, I get a little worried when I see headlines and articles like this. When no one thinks the sky is falling, is when an acorn seems to drop. (Not trying to be a “kill joy” here, but I have seen this too many times.) We are definitely in a bull market and there is great optimism. The good thing about our system is that it chugs along increasing our account value 1% to 1.5% at a time.

Comments: The markets are mixed (basically, flat) except for the Russell which is chugging along higher. The Fed Chairman is to deliver a speech today. If he doubles down on more interest rate cuts to help ease unemployment, we will likely see a lot of green today. 

Historically, this is a “Bear” day according to the almanac, but so was yesterday and it was very green at the end. I love the unpredictability of the stock market. It’s new every day!

I’ve got a trade idea this morning that’s going for around 1.21% return on risk into this Friday’s expiration.