Let me share a secret to my trading success

Hope is a dangerous drug.

Especially for hobby traders who want to become professionals.

I remember spending many of my early trading days jumping into a big momentum stock with a certainty that I would be riding it up to the metaphorical moon, along with the rest of the market. 

At the time, that didn’t feel like hope, it felt like a certainty.

But, as was often the case, I would jump in near the top and ride it down until my hope was utterly destroyed and I was left with despair -- and then closed out the trade at the bottom.

It’s hard to make money buying high and selling low.

Yet that’s the usual practice of those who smoke the “hope-ium” pipe.

It wasn’t until I discovered the late Mark Douglas and his teaching/coaching that I began to crawl out of the hope-ium life and on the pathway to professional trading success.

The secret?

Making a trading plan and then consistently executing the plan.

Success in trading is almost always a simple math game, and for me requires the removal of hope as a primary motivator.

Sure, I hope all my trades work out, but that does NOT drive my trading.

What drives my trading is the system I’ve put in place and then identifying when trades are setting up in congruence with that system. Then I take a trade. If it works, great. And if not, then I make adjustments.

It’s all a part of the plan.

Yahoo Finance

There are few major headlines from a “macro” point of view ahead of the FOMC meetings today and tomorrow.  This one caught my eye, though.  The article states…

“...the signal investors are apparently taking from these pacts from Europe to Japan to Vietnam is one of increased stability down the road.”

Markets love stability and hate uncertainty.  This is a good lesson for us.  The VIX is actually below $15.  That is crazy low historically.  It is so low that a LEAPS Call starts to look attractive.  (Maybe shorter term than most LEAPS, like 3 months or so, but that is not so much what we do in this framework, just a thought…)

Comments: The major indexes are opening green today. The DOW has drifted red since the opening. Generally, the Tuesday and Wednesday morning before the FED announcement the markets trade sideways waiting for news on interest rates.  We would expect much the same this week. It is earnings season so we may get some movement based upon good/bad earnings reports.

I want to talk about a setup that looks pretty good, but why I’m NOT taking the trade or sharing an idea for it. Should be a valuable education if you’re a Premium subscriber...