“I’ve always felt ideas were a dime a dozen. If you had one that didn’t work out, you should not fight too hard to save it, just go find another.”
— Daniel Kahneman
That can be applied to trading. Examine your decision-making process.
As a general rule, never add to a losing position. Hone your money management survival skills, so that inevitable losing trades don’t knock you out. You want to be there to reap the benefits of your big winners.
After all, there’s always opportunity in options.
PS Check out Michael Lewis’ The Undoing Project, about groundbreaking psychologists Kahneman and Tversky.
Operation Repo h/t IMDB, EGA Productions
“All the oil experts from the weekend are now repo rate experts.”
— Hipster, @Hipster_Trader
The repo news isn’t about automobiles. It’s about the beleaguered US Federal Reserve and their large overnight liquidity injections into the financial system.
We wish them Godspeed and good luck, as they try to thread the needle while pushing on a string.
“Doubt is not a pleasant condition, but certainly is an absurd one.”
Pre-strike overview of Saudi oil field h/t US government/Digital Globe via AP
“Although drone attacks damage refineries they strengthen walls of worry.”
— Walter Deemer, @WalterDeemer
“Novices think successful trading is about forecasting when it’s really about process.”
— Jack Schwager, @jackschwager
Over time, develop a sound trading process that’s right for you. Build your complete game plan for trading success on the cornerstones of mind, method, and money management.
Have patience, it tends to pay.
“The mystery in how little we know of other people is no greater than the mystery of how much, Laurel thought.”
— Eudora Welty, The Optimist’s Daughter
To me, reading is like walking on the beach and finding sand dollars. The sentence above, from a half-century old Pulitzer Prize winner, reminded me the same can be said of markets and trading.
Know there is never certainty, only probability.
There is no perfection.
Support your local library. Libraries are temples of learning.
Enjoy your weekend!
“This is hard to accept in the Age of the Internet. It has been very hard for me to explain that the more data you get, the less you know what’s going on, and the more iatrogenics you will cause. People are still under the illusion that science means more data.”
— Nassim Nicholas Taleb
Understanding this concept may benefit you in regards to your trading, as well as your health.
“Looks like everyone who wouldn’t touch energy/financial/value stocks with a ten-foot pole last week bought a 20-foot pole over the weekend.”
— Walter Deemer, @WalterDeemer
We’ll see if stocks can clear their late-July highs. They are certainly giving it a go.
Like the pole vaulter, make sure you have protection underneath for the influence of gravity.
“In maths, 10 x 1 is always the same as 1 x 10, but in real life, it rarely is. You can trick ten people once, but it’s much harder to trick one person ten times.”
— Rory Sutherland
h/t Jim O’Shaughnessy, @jposhaughnessy
It’s good to be back from a wonderful family celebration in New York. After all these years in California, there’s still just a little New Yorker left in me.
The Trade War Cycle h/t @StockCats
h/t Stockcats, @StockCats
Rinse, repeat. Around we go. Markets ramping up on hope for US/China October trade talks.
See cycle above.
SUBSCRIBER NOTE: We’re out of the office ’til Tuesday; headed east for a wedding, to celebrate with family. I’ll broadcast our Midweek Outlook on Wednesday, 9/11/19, with next Options Hotline scheduled for Sunday, 9/15/19.