You want to know a secret that changed my mentality around money?
Scenario: April 1st your portfolio was 100k and we went on this magical run where it climbed up to 140k as of yesterdays close. Then a day like today comes along and you happened to get stopped on all your positions and you are now sitting at 130k. Did you lose 7.14% today or is your portfolio up 30% in a month?
Unrealized gains ARE NOT YOURS. They belong to the market! If you want to mitigate volatility, trim into extensions. But if you are going to stress out about every down day as if the money was yours on an open position, you'll never truly be able to scale up comfortably.
Treat every new buy or sell based on it's individual price action. And stop looking at your portfolio value every evening as if the money on open positions belongs to you. Checking portfolio value every 10min only leads to emotional and sloppy execution when you look at the whole and not the individual parts.
If stock A is still acting great then it shouldn't be sold just because you took a small loss on stock B. Exit stock B and continue to let stock A work for its own merits. The minute you start to make emotional decisions because of money is when you ruin your chances at real growth.
Always love how they cite 'fundamentals' near the top after a giant rally lol.. but were bearish in March with the same fundies in place.
Markets move on sentiment positioning, and the highs and lows are always extreme to each side. The middle 68% of price action is where the value is found during the market auction process.
One of best market books you can is the classic 'Markets in Profile' by Dalton
If you are just selling puts as your options and investing strategy…
You are doing it completely wrong
You need to get long exposure to quality stocks
Buy shares
Buy LEAPS calls
Income alone from selling puts is NOT enough when $QQQ is up by 10% in a month
$NVDA $AMZN
There are a lot of reasons for concern in this market and it is great to be aware of them but each stock should be managed on its own merits.
Breadth is narrowing- ok, this is why you get stopped out of the stocks not working and continue to hold the ones that work
Volume is declining as stocks rally- Only Price Pays!
Inflation is up- cool, you looking to pass an economics test or make $ in the market?
Oil remains bid- equities don't seem to care.
Bond yields are up- do you trade bonds?
The market climbs a wall of worry.
Focus on risk management and when the market is extended and you have reasons for concern then be on your toes but don't throw your stocks away.
Sit on hands or smaller size on new positions.
Dont buy dips, buy strength after.
Focus on trends and market structure.
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You’ve only got to get 2 things right as an investor.
1) Buying the world's best companies making "must have products and services" when nobody wants 'em & selling when others can't resist buying then
2) Keeping risk as low as possible at all times by using simple, proven tactics that take away Wall Street’s advantage and keep the odds on your side.
👏😀
One of my favorites ✊🏼🙏🏼
"It's not about how hard you hit. It's about how hard you can get hit and keep moving forward. How much you can take and keep moving forward." -
Rocky balboa Sylvester Stallone
https://t.co/aydGdNwzfg
Stick to long term plans. $spx monthly flows win. 529 plans can pay for college
Markets take the stairs up and the elevator down."
This chart proves it beyond any doubt.
S&P 500. Every bull and bear market since 1949.
Bull markets:
→ Average 5.3 years
→ Average +254%
→ Longest: 12.3 years, +841%
Bear markets:
→ Average 1.0 years
→ Average −31%
→ Worst: 1.4 years, −55%
The asymmetry is breathtaking.
You spend years building wealth on the stairs.
Then the elevator arrives and takes a chunk back in months.
But here's what the chart really shows.
The blue always came back.
Every single time.
And always went higher than before.
The bear markets look terrifying in the moment.
On a 75-year chart, they look like speed bumps.
The stairs always win.
Time is the only ticket you need.
You’re never out until you’re out.
Play the game in front of you. Not the game you wanted to happen. Not the game that just happened. Not the game you hoped would happen. But the game that is happening.
It's a remarkable lesson for basketball, for all of sport, and really, for all of life.
In the Elite 8 of the NCAA tournament, the UConn Huskies came out flat against the No. 1 seed Duke.
The Huskies trailed by 15 at halftime.
No. 1 seeds were 134-0 all time in the NCAA tournament when leading by 15 or more points at halftime.
That’s across the entire NCAA tournament history. Every round. Every year.
UConn had every reason to give up. But they simply refused. Most people check out when the odds turn against them. But UConn never stopped playing to win.
Their big man Tarris Reed Jr. put the Huskies on his back. He played incredibly on both sides of the ball.
The Huskies cut the lead to 13. Then to 11. Then to 7. Then to 5. And then, in the final seconds of the game, they cut the lead to two.
Duke inbounded the ball, UConn pressured and forced a turnover. With less than a second on the clock, Braylon Mullins—who had shot 0 for 4 from three—put up a deep 3 from the logo, and nailed it.
UConn 73. Duke 72.
134-1.
After the game, UConn coach Dan Hurley said this about Mullins:
"The courage. You have a young man, he's a rare human being. The toughness about him, to take the shot, on a tough shooting night, but he was due."
It was an off night. And yet with everything on the line you have no choice but to pull the trigger. Shooters shoot. That's confidence in the process.
March Madness is an ultimate test of emotional regulation. Over 3 weeks and 6 games, nothing ever goes to plan.
You prepare. You practice. You visualize. Then stuff happens.
The difference between those who collapse and those who rise? How they respond, especially when things don’t go their way.
What's true in basketball is true in life.
It's easy when everything is going your way. But things will go wrong. You'll fall behind. The score won't look good. Most people check out when the odds turn against them.
UConn never stopped playing their hardest.
Not when they were down 19. Not when they were 1 for 11 from three. Not when history said it was over.
It’s called having a next play mentality:
You can't control what already happened. You can't control the score. You can only control the next play.
One stop. One bucket. One possession at a time.
That's how you erase a historical deficit against the No. 1 team in the country. It's how you work through the biggest challenges in life too.
Excellence does not mean control. It does not mean perfection. It means refusing to quit on yourself when the situation looks hopeless. It means trusting your preparation even when nothing is falling.
It means playing the game in front of you. Not the game you wanted. Not the game you hoped for. The game that is happening.
Stay in the arena. Play the next play.
Option Selling is not about picking the perfect strike prices and avoiding assignments
There will be MANY times when the stock goes down hard AFTER you sold a put
And there will be MANY time when the price remains way below your strike price and you will be assigned the shares at a much higher price than the current price
Then it’s not easy to just wheel the shares by selling Covered Calls
But as long as you are willing to hold that stock you can afford to be patient
Even the best researched stocks and trades don’t go thru perfectly sometimes
Just accept that fact
Either be patient or take a loss and move on to other trades
The patience of all option sellers will be tested now
It’s easy to stay patient when you are seeing profit after profit every month…
But now comes the hard part…
Actually living through hard times
Do you have the cash to invest and sell more options NOW?
Do you have the mindset to BUY shares now?
Do you have the mindset to SELL options now?
This is why you NEVER trade with your max cash every month
Always need to have cash available at ALL TIMES to take advantage of such situations
If anyone tells you that in order to be successful in trading you need to make some unknown discovery on your own... This is a lie!!
- I learned about volatility contraction and progressive exposure from Mark. @markminervini.
- I learned about momentum bursts and Episodic pivots from Pradeep @PradeepBonde
- I learned about the importance of creating a model book for myself with 100s of past examples. As well as the idea of focusing on higher ADR stocks from Kristjan @Qullamaggie
- I learned about stage analysis from Stan @StanWeinstein13
- I learned how to read and interpret COT data from Jason @Crowded_Mkt_Rpt
- I learned the right side of the V concept and proper bet sizing on A+ opportunities from Lance @TheOneLanceB
- I learned to think a little more contrarian from watching @TheShortBear
- I learned about the flat base breakout and value in leading groups from @PatrickWalker56
- I learned about the HVC/HVE edge from @AmeetRai
- I learned about trading more aggressively during high momentum periods from @DanZanger
- I learned about the Undercut and rally or Double top short sale setups from Gil Morales @gilmoandco
- I learned how to think about creating and implementing systems from @Peoplewish
- I learned the failed follow through setup on an intraday timeframe from @InvestorsLive
- I learned about the importance of prior day channels from @danshep55
- I learned about support and resistance gaps for entries from @NickDrendel
- I learned about using the 50sma as a guide to measure extensions from @jfsrev
- I learned about creating a daily trading plan from Marcel Link.
- I learned about the CANSLIM methodology from Bill O'neal
I'm sure there are many I missed but the point is:
Trading knowledge is passed down from one generation to the next. But it is up to us, the trader, to implement what we have learned in a safe manner while we put together all the pieces for ourself.
We live in a time where you DO NOT need to make up some magical elixir for trading in order to be successful.
All the people mentioned above have found an exploitable edge in the market, and like myself relentlessly execute that edge over and over.
I am personally grateful for all of the educators I've had along my journey; which is part of the reason I so willingly share any bit of knowledge I acquire along the way. The same way they all graciously imparted knowledge on me.
So what’s the lesson?
Pick good stocks and they will eventually work out
Even losing trades will be profitable with time
I love $AMD
My shares will keep appreciating and my LEAPS calls will keep growing
And I will make income by selling short puts
When trading breakouts becomes increasingly more difficult it is often one of the earliest leading indicators of an impending market downturn.
If your go-to setups suddenly stop paying and start failing, it's usually a clear signal to tighten up risk, reduce size, or go to cash.
I've worked with many top-performing traders over the years, guys who crush it year after year, and this is one signal they all respect without exception. Breakouts don't randomly become more difficult. The market's telling you something's shifting beneath the surface.
Ignore it at your peril! Respect it and survive to trade another cycle.
What are you seeing in your own setups right now? 📊