Confession: I’m guilty of making this stupid mistake

One of the dumb mistakes I used to make -- and this followed me into my early years of “dumb trading” -- was not changing my mind.

Something inside of me wants to stick with a decision I make no matter what sort of information creeps in telling me that my good idea has become a bad idea.

I guess that’s good loyalty, but not wise.

The reality is that every decision we make is really an ongoing series of decisions.

For instance, whatever business I’m in, every day I wake up and choose to either keep “buying” that business (that is, keep working in it as it’s my best way to make money) or to “sell” that business and find the next best alternative.

We all do that with the ongoing choices we make.

Thus, it’s foolish for me to make a decision months ago, find out later that it’s actually not that great an idea, yet still stick with it because I want to be a man of my word.

Newsflash Ricky: you’re allowed to change your mind.

... 

I know that shouldn’t be some earth-shattering news. But when that idea dawned on me for the first time years ago, it gave me tremendous freedom.

If friends invited me to a movie and I later decided I didn’t want to go ... I could just call them up and cancel (note: this is different from no-call, no-show, which is a despicable habit that anybody doing should stop immediately.)

Anyway, it’s similar in trading.

Once you’re in a trade, you're not locked-in forever. Every moment is a tiny decision to stay or go based on the current data you have.

Luckily, I’ve got a trading system that gives me the flexibility to turn losing trades into winners. All it requires is patiently following the plan. 

I don’t have a launch date yet to share it with you, but I’m probably mere weeks away.

From the article…

“The spotlight is now on weekly jobless claims data due later, given Fed officials have highlighted concerns about slowdown in the labor market. Thursday's docket also brings readings on US second quarter GDP, personal consumption, and existing home sales, among other economic data.”

Markets need both money and information. Historically, today is a “Bear” day according to the almanac with tomorrow a “Bull” day. From a Macro perspective this makes a lot of sense. The large money managers are flush with cash from last Friday’s expiration and have been evaluating where to put it for the next 3 months or so. Prices drift lower without this cash infusion which will probably happen tomorrow, hence the “Bull” day after the “Bear” day.

It might not happen like that, but the article is in the weeds talking about tomorrow morning’s jobs report. This will probably direct the money managers a bit, but it seems more likely, tomorrow might be green as there is a dip to buy.

Comments: Today’s opening is decidedly red drifting lower without a catalyst (jobless report) to move it one direction or the other. This will likely reverse tomorrow. If you have dry powder, this might be a good day to sell puts into next week for a 1.5% - 2.0% premium. I suspect there will be some bargains out there.

A new Alpha scan trade at about 1.15% return on risk into next Friday’s expiration.