How to thrive in the choppy market seas

The market this week has been up-and-down.

Like a boat getting tossed on the waves of a stormy sea, this kind of directionless chop has a tendency to eat away at profits. Especially for long traders.

When I first started trading, I liked to follow the momentum trends. Seeing a stock break out and start moving higher led me to jumping on board the boat. Sometimes that worked as it kept going up and up. And sometimes... 

... I (metaphorically) lost my shirt!

At least I had enough risk management sense to stay in the game.

Eventually, I learned a better way to trade through chop -- and, bonus, it applies to all types of markets too.

Selling, not buying.

The beauty of Options trading is that even us little dinghies can lend liquidity to the markets by being sellers. In other words, we can be the casino, not merely play the casino. And when it comes to trading through market chop, especially, the sellers are in a much better position than the long buyers.

I learned that lesson the hard way.

You’ve just heard it here, so hopefully I’ve saved you some heartache.

Now, go out there and reel in a few fish (i.e., trades).

It's been a rocky few months for Apple, but it appears its relationship with Trump is back on solid footing, for now.

Yahoo Finance

Why it matters …

Admittedly, it’s a slow news day so far. The President, through his tariffs, is putting pressure on companies (domestic and foreign) to invest in the United States. This is a challenge similar to parallel parking an aircraft carrier … it can be done, but it takes a while! 

Apple, like so many other companies, was forced to outsource/offshore most of their components to China and other low wage labor markets across the world to stay competitive. The tariffs changed the game so that it now makes more sense to build those iPhones domestically as much as possible.

I would expect more headlines like this in the coming months. I would also expect the U.S. Economy and jobs numbers will be very good in the next few years. I’m sure there will be some Macro bumps in the road, but the trend looks to be up.

Comments: A very green opening to accompany the slow-news day. Bitcoin is taking a breath after a strong day yesterday. The other indexes are moderately up. Since its Friday, Options expire and there may be some profit-taking at the end of the trading session which might push some indexes toward red if not actually red.

Green Fridays and Red Mondays are a good recipe for my framework. It doesn’t always work out that way, but it sure is nice when it does!

My new scans that I’m testing gave me a stock with an almost ideal setup, and one with 1.48% premium into next week...