This is a “Lesson From the Room”, which are usually me ranting on an answers to a question artfully asked by my fellow traders in the room.
Here was the question (thanks Matt)
If good trade news was a “sell the news” event, is bad trade news a “buy the dip” event? Does support hold? Do we get/stay below important levels?
Unleash my answer/”rant”. Unedited, straight up from the room and copy+pasted.
I dont think theyre correlated 4/5 analysts would disagree probably 9/10 probably 99/100 but none of them are looking at the REAL things.
Not which chart crossed point $X and correlated with chart $DUMB which overlayed with chart $ARBITRARY, They’re looking at the real macro shit.
I need @Pyrognosis in this bitch to explain it..
Even I dont know the numbers that well but what is the TRUE nature of China Trade..their economy…and the health of our economy or trade?
Bill Clinton…so WIDELY respected for the financial changes that occurred during his administration yes. of course. that was all policy right? or was it that he was president leading into and through the tech boom?
Why does China have ANY leverage over us? we gave it to them. we outsourced for cheap labor then blamed the Mexicans for taking domestic jobs while everyone wants to sit on their ass and just collect money through mystical ways and means.
Or be given it by E.Warren or Sanders. ive never seen a full presentation on those numbers. our gains for outsourcing that cheap labor. the stock market over here certainly lovely it. massive margin boosts. now they complain? well they arent the government is. but why didnt we keep US job afloat? because of our monetary theory trying to coddle the poor into thinking they arent as poor as they are lowered borrowing standards.
30 years ago if your FICO was sub 700 GL HF.
These days if you have A score. any score. 400 or 800 heres your loan. thats not economic growth or the “American Dream”. that’s the rich taking from the door. if you want to be cold but scientific it is Darwinism in a very base form.
Poor and broke? That’s your fault, society and the socialization aspects of your life have nothing to do with it.
You are poor because you are not the fittest. Do I agree with that? No. But that’s where Keynes and Jackson Hole and even Jekyll Island all come into play.
Blame the elite and rich because they’re evil and will eat your soul to feed your babies. or their babies for that matter. or maybe they’ll eat everyone’s children and use eugenics to destroy everything we know. or you use your common sense (If such sense is allotted to you)…you use decency and not needing the newest product XYZ to come out so you seem cool.
I’m a trader as a living and I trade off my phone all the time. I don’t upgrade phones until they break. Yet someone’s 12-year-old needs the newest phone so they post higher-res pictures onto their Instagrams.
Get over yourselves people.
Want to be a big shot trader? Do this for your living?
Good luck. The odds are stacked against you.
The majority of people reading this will NEVER be able to that for your income or even to live.
Most of you will actually lose money on a regular basis. Until you stop. Admit to yourself the system is against you not for you, and you might me smarter than me…but that doesn’t mean you’re smarter than the other people around you.
Trading is rigorous. Sometimes it hurts. It hurt me before I got to where I am..where I eat and live by my P&Ls.
I have no other job. Until you’re there…..stop complaining. Stop blaming politicians or bankers or FuRus or even me you took a trade.
Did you lose $$$?
Well, that was your trade. you hit buy and sell. so it is your mistake and your mistake only.
If you followed someone into a trade, then lost….why did you follow them in the first place? Bottom Line and the end of this rant….
Be happy with what you have. Don’t put what you barely have into the market so you end up needing to find more money to feed your family rather than being disciplined and trading and investing what you can afford to lose.
If you are out of a job and trying trading because you have some money to spend (without any more coming in somehow)….go SLOW. There is no one day where all of a sudden ANYONE says, ok I am a trader now.
This is how I will earn my income for the rest of my life. You get there. Through thick and thin. Through profits and losses. You get there. The percentages stay the same. 10% of you will consistency make money on your equity trades every single year on a consistent basis that means that trading is what you can do.
I’d like to enjoy the notion that maybe the people who follow me might be in the higher %s of that…but I’m not going to lie to myself or you.
Get a job if you’re a “trader” because it’s what you grew up to want because it looks SO EASY. It is that easy….once you get it and have the capital to really and truly get it. Which isn’t to say you want to make losing trades.
Nobody is 100%. NOBODY.
And now the true wrapup.
You can make money in markets. You can make it a livelihood like myself and many others have.
But if you’re not…and you are consistently losing money….do the analysis of your losing trades.
Find out where and why you lose the most often.
Find a “mentor”.
Not a FinRu. Someone that takes you through trades and teaches you things, not someone that just tells you to buy this and sell that. Some might call me a FinRu (Financial Guru) because of certain eccentricities of how I present myself on social media, using tags like #drosflow or #drosknows …
But if you’ve ever engaged me in a trading room or even just randomly on Twitter or StockTwits, I’ll be the first to tell you I don’t know a thing beyond what I think I know.
What I know are rules. Not forecasting or guessing. But simpleton rules. If you made money on a trade that might come down against you the next day, close out before closing with a MOC (Market On Close) order. A prime example of that would come from even this weekend.
Friday was a super-gigantic bullish day.
Everything and their mother was up like Cocaine in the 80s in Miami.
Now we hear from Trump tweets that more tariffs will be imposed on China on Friday due to a slowdown in talks. We literally heard that on Friday trade talks were smooth.
All was well. Again…what changed? Maybe someone missed a dose of medication. Maybe (more what I am aligned to thinking) the deal and terms are already done and have been, and now the respective governments are using the sentiment of the people (masses) to shove government policy down their faces.
What that truth is, I have no way of knowing; I can only guess or assume. But as one of the 10% of traders that can and has been doing this…don’t form your own biases or opinions. Or at least ones that you are hard set in. That’s how you lose money trading.
Instead, inform yourself..create ideologies or thoughts…but listen rather than dismissing those who believe different things. It’ll keep you flexible. Trading isn’t about being right or wrong in absolutes. It is about being right but being flexible when you’re wrong.
Don’t be stubborn and lose a ton of money on a certain trade because you ‘thought’ you were right. Be stubborn, cut the loser on your stubborn part, then get back in when your thesis comes to fruition and you’ll actually make money.
Oh this stab to my gut will just clot up and I’ll be fine, let me just wait. Or…this stab to the gut might kill me, let me get it taken care of properly (e.g. – exiting a rapid advancing loser) then get back into the game (I guess knife-fighting in this example) once things seem to be going my way again. So to be stereotypical in the utmost of stereotypes…cut your losers, let your winners run.
But know what is a +200% profit on a trade might easily be -200% on that same trade tomorrow. How do the best traders mitigate their losers or decide the right time to exit? Exit with profit when it’s there.
Kill your losses if they are accelerating at an alarming pace. With the full knowledge that you can re-enter the position one that downside has stopped. With that said, and I know I was somewhat all over the place there, but I was for a reason.
The reason is you and your portfolio and your future in the game of trading. Use common sense rather than fancy algorithms or crazy backtesting models than have 4 instances of ALWAYS working *cough* yield curve inversion *cough*. Yeah YOLO short on that inversion.
Oh, wait. We aren’t inverted anymore and markets hit ATHs last week.
Enjoy the rest of your weekend and trade safe.
P.S. – On this day in History, May 5th, 1925 , teacher John Scopes was ARRESTED. FOR TEACHING EVOLUTION.
Yep. We, the people, of these United States…can be ignorant or stubborn when it comes to changing beliefs. Just don’t let that be your trading or I promise you, you aren’t cut out for this game.