Confucious, gouache on paper, c. 1770. Detail. h/t The Granger Collection, New York
“In all things success depends on previous preparation, and without such previous preparation there is sure to be failure.”
Preparation pays off when put into action.
We see examples each day of how preparation pays. This was evident during yesterday’s Michael Cohen hearing. A handful of well-prepared Representatives used their time wisely to elicit information. Others, not so much.
Failure of Mr. Trump’s Vietnam meeting with North Korea’s dictator may be attributed, in large part, to failure to prepare.
Preparation is key to success in sports, in life, and in speculation.
Prepare thoroughly for each trade.
Overanalysis, h/t Larry Pesavento, tfnn.com
“Visible mess helps distract us from the true source of the disorder.”
— Marie Kondo, The Life-Changing Magic of Tidying Up: The Japanese Art of Decluttering and Organizing
Tidy up your charts.
It will help you see the market’s movement clearly and help prevent paralysis from overanalysis.
The Marie Kondo organizing phenomenon is sweeping the globe. Cleaning up your living space is clearly beneficial.
Cleaning up your charts can spark joy in your trading.
“Don’t ask for the meaning, ask for the use.”
— Ludwig Wittgenstein
The market will go where it wants.
Traders can easily get overloaded with information. Often, the inputs to your above-the-neck system will be in conflict. That leads to paralysis.
Know that that there’s no Holy Grail for traders.
The closest thing to a Holy Grail is Hard Work. Get the best information you can, pick the indicators you like best, and put them into action.
Place your emotions aside and focus on going forward.
That’s my Tuesday tip.
Oscar Wilde Memorial Sculpture, Merrion Square in Dublin, Ireland. Photo credit: Sarnoff
One day a tax collector called at Wilde’s house in Tite Street.
“Taxes! Why should I pay taxes?” said Wilde.
“But sir, you are the householder here, are you not?” You live here, you sleep here.”
“Ah, yes; but then I sleep so badly!”
— The Wit and Humor of Oscar Wilde, edited by Alvin Redman
Wilde lived extravagantly and was lavish in his hospitality to friends and acquaintances. He spent money with utter disregard for the future. He believed he held a cornucopia in his hands and that contributed to his undoing.
Here’s to getting through tax season and your week getting off to a wonderful start.
Plan to Work, h/t actioncoach.com
“Plans are only good intentions unless they immediately degenerate into hard work.”
— Peter Drucker
Developing a complete game plan for each trade is key to successful speculation. But it doesn’t happen without putting in the effort.
Nothing worthwhile is ever easy.
Have a great Sunday, and be ready to put your plan into action!
Actress Betty Field dances the Charleston during a poolside party scene from the 1949 movie The Great Gatsby (Bettman / Getty)
“The financial community is now secure in the knowledge that the most powerful banks in the country stand ready to prevent a recurrence of panic.”
— New York Times, 10/24/1929, h/t John Kenneth Galbraith’s The Great Crash of 1929
This past week’s release of the minutes from the late-January meeting of the Federal Reserve’s policy-making committee reflected a dovish Fed friendly to the markets.
Perhaps overly so.
We shall see. In any event, keep calm and enjoy your weekend.
Portrait of the Stoic philosopher Chrysippus, 2nd century AD, Louvre Museum, photo by Carole Raddato (cc) 2012.
“Don’t hope that events turn out the way you want. Welcome events in whichever way they happen: this is the path to peace.”
Taking a stoic view of trading gives you an edge over emotional market participants. That approach is useful in handling losses as a natural and inevitable part of life, as well.
Wishing you a profitable and peaceful Friday.
Charlie Munger, iconic investor, businessman, and philanthropist h/t Los Angeles Business Journal
“Assume life will be really tough, and then ask if you can handle it. If the answer is yes, you’ve won.”
— Charlie Munger
Adversity is inevitable in life. How you deal with it can shape who you are and where you go. Munger has dealt with terrible personal tragedy in his life and come through it to be an inspiration to others. He believes adversity can cause some people to transform themselves into victims.
Far better for you to avoid drifting down a trail of envy, resentment, revenge, and self-pity. That leads to paranoia, which is hard to reverse.
In life, and in trading, take responsibility for your losses. Work to remedy them as best you can.
A positive approach will light the way to where you want to go.
“Gold is still significant. I ask myself, if it’s a relic of a long history, why is there a trillion dollars held in gold by the world’s central banks plus the IMF and all the other financial institutions? If it’s worthless and meaningless, why is everybody still holding it?”
— Alan Greenspan
A few weeks ago, we posted about gold. The Midas metal continues to be a store of value and is trading at a 10-month high.
Our recommended precious metals play for Options Hotline subscribers (triggered 02-04-19) is trading +95% in less than 3 weeks, with an always known and strictly limited risk.
If you want to subscribe, sign up here to see what our next move is.
Windsock, h/t iStock by Getty Images
“Technical analysis is a windsock, not a crystal ball.”
— Carl Swenlin
A windsock is a device used to determine the current wind direction and relative intensity. A crystal ball is a mere prop used to predict the future.
A windsock’s general purpose is to give the pilot a quick reference as to where the wind is coming from and the approximate wind speed. Before accelerating for takeoff, you glance at the windsock for information so you can give the necessary rudder inputs while the plane is rolling down the runway.
That’s how we apply technical analysis to trading.