Trading lesson from a cartoon panda 🐼

When I first jumped into stock trading, I was looking for the Holy Grail.

I didn’t know it at the time. What I was hoping for was that I would discover the one key to making all my dreams of wealth & success come true. Maybe I would get lucky and jump into a Netflix-like trade that rose 700%+ over the course of a year.

... yeahhhhhhhhhh

That didn’t happen.

What did happen was a lot of valuable lessons learned (through pain).

One of the big ones being the same lesson taught by a cartoon panda in the first Kung Fu Panda movie:

There is no secret ingredient.

Turns out, there is no Holy Grail. It’s always been hard work in the right direction. An alternative formula is Accurate Thinking + Right Behavior.

Potato, potahto.

(that 👆 line makes more sense when read aloud)

Now, having said all of that, the trading system I now use feels as much like a Holy Grail as I could ever hope for.

Its rules are simple, it only takes a few minutes each day to execute, and it works around 98% of the time. Yet, by design, it’s never one trade that brings in all the hopes and dreams. It’s this steady work of trade after trade after trade inside the system.

Thus, it’s hard work in the right direction.

(ok, clicking a button on a mouse is not physically hard, but sticking to a system even when a trade posts an unrealized loss of tens of thousands of dollars is psychologically hard work.)

Anyway, if you’re looking for the Holy Grail like I was, I’m bursting your dream bubble today.

It’s always better to face reality sooner rather than later.

Quarterly sales beat forecasts as its low-price strategy attracted shoppers, but earnings fell short.

Yahoo Finance

Walmart has become so large that this is actually a “Macro” event. The earnings miss is lining up with other retail earnings misses indicating the economy is not as strong as might have been thought. These are data the Fed needs to move interest rates. If people pull back on their spending, lowering interest rates will stimulate growth in the economy (and more jobs) with less fear of inflation. 

However, I must point out that after the minutes released yesterday, we’re seeing that the Fed is more concerned about inflation than jobs. Which may mean no rate cut in September. (I still lean toward them cutting a quarter point, but they’re still talking “hawkish.”)

The markets are pulling back, but they are really just waiting for the Fed Chairman’s speech in Jackson Hole tomorrow.

Comments: We are looking at a red start for the day as a knee-jerk reaction to Walmart’s earnings miss. I find it interesting that the Nasdaq has pulled back near some key support levels which might make it ready for a bounce upward. It is still very strong for the year (up 9.64%) so a further correction is very possible.

I’m continuing to dial in my new scans, I’m now alpha testing them and I’m liking the results so far. Today’s Premium subscriber sample trade idea can yield 2.20% premium for next Friday’s expiration (yes, over 2%)...