Tough lessons from the trading school of hard knocks

No training wheels for traders.

I suppose you could go out and do a lot of “paper trading,” writing the trades down or using the paperMoney® portion of ThinkorSwim®. But these “safe” trading laboratories have a big flaw:

They cannot help you practice the psychology of dealing with real money on the line.

What’s more:

There is no “kiddy pool” for trading. When we’re in the market, we’re swimming with all the sharks. Most of them are hungry.

Thus, my experience over the years in trading myself and listening to different mentors is that everyone pays the cost from the trading school of hard knocks. I’ve been beaten bloody many times by the markets. Every successful trader I’ve ever talked with has too.

The good news is that eventually you either figure out how to be a disciplined trader... or... you leave the profession and look for an alternative that better suits your own business personality.

I’ve actually done both.

I left the trading profession for about 3 years, choosing to learn marketing and use my business skills in the freelance world. Then, over the course of about three months back in 2023, I started hearing of a trading strategy that could be both profitable and avoid losing money around 98% of the time.

Because I couldn’t deal with taking big losses in my previous trading experience, this intrigued me.

I jumped in and I’ve been enjoying the trading profession ever since.

Oh, and being disciplined is part of it, but all I have to do is trade my plan.

Easy-peezy-lemon-squeezy.

All right, let’s talk about today’s news... 

Yahoo Finance

Why it matters …

We probably need to expect the market to act a bit like a Fed reporting day today.  The President is to meet with Ukraine and European leaders about what Russia wants to end the war.  It is unlikely the markets move much until the meeting ends. (I think it is unlikely there will be a good result from the meeting which will probably push the market down, but stranger things have happened.)

Should the Fed stand pat on interest rates to cool inflation, or cut them to support jobs?

Yahoo Finance

Why it matters …

You will probably hear a lot about this summit this week. The Fed has an annual retreat in Jackson Hole in August … “Your tax dollars at work!” ha There are lots of meetings and speeches in this boondoggle. Usually, it amounts to nothing but fluffed economic stories to fill the news cycle.

Comments: It’s a mixed morning. Really, it’s pretty sideways. We are above the week-ago chart a bit, but not much. Bitcoin is down today and down from a week ago as well. It is its own beast.

... 

For our Premium subscribers, I’ve got four trade ideas to consider. All of them are trades I’ve taken in at least one of the accounts I trade (yes, including the sample trade idea). The average ROR% for these trades? 

1.42% this week.