Happy Friday, Evolvers!
The big story in the market this week was the August Consumer Price Index (CPI) Report, a pivotal inflation gauge for the Federal Reserve…
The consumer price index rose 0.6% in August, its biggest monthly gain of 2023. This represents a 3.7% increase from a year ago.
But the market remained strong, shrugging off the September Effect (for now) and rising more than 1% in the two trading days following the CPI report.
Will the market keep up this resiliency? We’ll have to wait and see. I expect some volatility in the near future.
However, now, it’s time for our Friday Q&A.
Keep reading to see my answer to your questions from this week…
“Why hasn’t the market crashed yet? My due diligence and research tells me it should’ve crashed months ago … but my puts are tanking!”
There’s an old adage in trading that you need to hear: the market can stay irrational longer than you can stay solvent.
I can’t tell you how many times I’ve watched students ruin their accounts – and their dreams of being world-class traders – by “holding and hoping” positions that have been proven incorrect repeatedly.
There are a few important lessons here:
- Stop caring about your market predictions being right, and start prioritizing profits…
- Even if your general views are correct, there’s no guarantee that you’re exactly right on the timing of your trade…
- Cut your losing positions quickly…
- Don’t be stubborn…
Take it from me, I’m a naturally stubborn trader. I want to nail every setup to the absolute maximum.
In other words, I’m a perfectionist. And this part of my personality has its pros and cons.
I’ll always recommend that you strive to be the absolute best trader you can be. But there’s a fine line between steadfastness and inflexibility…
If you think you’ve found the one-and-only strategy that will work in every market condition — you’re wrong. Ditch the ‘one-size-fits-all’ mentality.
One day, your favorite pattern or setup will fail to deliver.
And in those moments, if you don’t have a diverse playbook to pull from, you’ll be left in the dust by other traders who do.
CAUTION: Prepare to adapt to ANYTHING the market throws at you.
This is why I’m always working toward fighting my stubborn urges and viewing each setup objectively.
And when I’m able to do this, I trade better than ever.
Bottom line: Don’t be stubborn — be nimble!
“I’m so mad about missing the long trade on CGC and other weed stocks.
You’re having FOMO…
And the first step to avoiding FOMO is to tell yourself you’ll never chase trades that are outside of your strategy.
If you make this promise to yourself and stick to it, you’ll have nothing to worry about when it comes to FOMO.
But I get it. It stings to miss a five-star setup.
That said, if you trade long enough, you can’t expect to nail every winning trade out there. You need to be discerning with which setups you trade.
If you subscribe to my alerts, you’ve probably noticed that I don’t trade every day.
That’s a conscious decision. Some days, I don’t find any setups that fit my strategy.
I like Tim Sykes’ philosophy of “trading like he’s retired.” I think that’s a good way to look at it.
If I let FOMO get the best of me, I’d probably make a bunch of trades that don’t work within my game plan.
In fact, when I was first starting as a trader, I did exactly that…
But my years of experience have taught me to stay patient and disciplined. These days, I’d rather miss a potential win than take a big loss.
REMEMBER: Trading opportunities are like trains … there’s always another one coming.
Whenever you’re considering getting into a trade, ask yourself if it fits your overall game plan.
- If a setup doesn’t show elevated volume — pass.
- If a setup doesn’t display the technical indicators I look for in a chart — pass.
- If a setup doesn’t have a major catalyst — pass.
However, if I find a setup that checks all of these boxes — I seriously consider putting the trade on.
So, why should you care?
Because sticking to these rules has helped me make over $4 million in the market.
And speaking of crushing the market…
Are You Ready To Level Up Your Trading Game?
Here’s the truth … I wouldn’t be a multi-millionaire if I hadn’t joined Tim Sykes’ Trading Challenge so many years ago.
And I want you armed with all of the tools necessary for success in the stock market.
So, if you’re passionate and dedicated, ready to take on anything the market throws at you, then I’ve got something for you…
My mentor, Tim Sykes, has helped traders learn to succeed for years. More than 30 of them (including me) are now millionaires.
Are you ready to take your trading game to the next level? Do you have what it takes to face the Trading Challenge?
Let’s find out…
I’m excited to see you there!