Tom Hanks in Cast Away, h/t Reuters
Successful speculation is as much about honing your survival skills as it is about finding winning trades.
You hone your survival skills by applying sound principles of money management.
Here are a few for traders:
Speculate based on what you can lose, not what you can gain.
Don’t overbuy or add to a losing position.
Remember to take your original stake out, so you can play with “house’s money.”
Do stay well,
Winston Churchill, 1942
“Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.”
— Winston Churchill
h/t Walter Deemer, @WalterDeemer
h/t Craig Impelman / Success
“Failing to prepare is preparing to fail.”
— John Wooden
Language matters; it carries weight and power. What’s called for during these trying times is more aptly “physical distancing and social solidarity.”
Be smart and stay safe.
“Bull markets try to take few along for the ride. Bear markets try to claim as many victims as possible.”
— Wall Street adage
A woman in front of electronic stock board in Tokyo, from January, 2020, h/t AP Photo/Koji Sasahara
“Traders should study the markets, not the virus.”
— Walter Deemer, @WalterDeemer
“More data — such as paying attention to the eye colors of the people around when crossing the street — can make you miss the big truck.”
— Nassim Nicholas Taleb
Successful speculation is as much about honing your survival skills as it is finding winning trades.
Don’t suffer paralysis from over-analysis.
Pick the indicators you like best and use them.
That can can help you stay a step ahead of the crowd.
Subscribe to Options Hotline today, to see how we use puts for protection.
Chart by Steven Sarnoff, h/t stockcharts.com
“Stocks take the stairs up and the elevator down.”
— An old market maxim
FYI: Our subscribers are positioned in protective puts on the QQQ since mid-January.
Sign up today to stay a step ahead of the crowd.
“Embrace selloffs because that’s when the market gives you its best clues.”
— Joseph Fahmy, @jfahmy
Keeping your eyes open to developing divergence between the action of individual stocks and the market can provide powerful information.
If a stock is holding up well while all around are down sharply, that tells you something good.
Casper David Friedrich’s 1818 oil painting, Wanderer Above the Sea of Fog
“As a practitioner of uncertainty I have seen more than my share of snake-oil salesmen dressed in the garb of scientists, particularly those operating in economics.”
— Nassim Nicholas Taleb, Fooled by Randomness
Trading options is to practice uncertainty. The painting above represents my view of work each day.
The characteristics of a successful trader are: knowledge, discipline, courage, and hard work.
Then it’s up to luck.
Options Hotline is in its 31st year of publication, helping sensible speculators vie for fun and profit by providing specific, actionable information and recommendations.
Subscribe today to join our readers, navigating uncertain markets and staying a step ahead of the crowd.