The Good Thing About Being Down

  • A little about psychology, trading and life
  • Update on AUDNZD long position
  • Continue to battle with the SPX500

PART OF THE GAME - It's been quite a run for my trading since December 2015, with consecutive profitable months into July. But July has been a struggle and it's very possible the streak comes to an end this month. Of course, we still have a long way to go and yet the point is, there are going to be losing months along the way. We are in the game of speculating market direction and with speculation, you are never going to be right 100% of the time. 

BASKETBALL AND TRADING - It's worth noting that even with current setbacks, we are still up well over 25% year to date. That's a pace that betters performance in 2014 and 2015 and one that is nothing to be ashamed of by any stretch. And so, I continue to look for the trades I love and will keep playing the game. I suppose it's kind of like playing basketball or any sport for that matter. I happened to play basketball so the analogy with this sport rings loudest. Sometimes your shot isn't going to go down. But the answer is to just keep looking for your shot and taking it when it's there. It will go down again and that is the critical point!

PSYCHOANALYSIS - If you are doing all the right things, there is no reason to expect that things won't once again go your way. If I were to apply psychoanalysis, I would say the biggest difference between those who are successful and those who aren't is in the thinking. The people that aren't successful get hit hard when they are down and don't believe things will ever go their way again. They lose faith the moment the chips are against them. But when the successful ones get hit and are knocked down, they always know things will go their way again and are excited to get back up. 

MENTALITY - It's funny when you think about it. We all know life has its ups and downs and yet, some of us have this incredibly counterintuitive instinct to believe the world is ending each and every time we get knocked down. All of this knowing full well that things always get better again. This is a poisonous mentality that makes no sense and will result in a very unhappy lifestyle. Whenever you are down, make sure to tell yourself that you know you will be back up and feeling well again in no time at all. Remember the last time you were down and how you were able to emerge from that despair. 

PROBABILITY - Ultimately, there is nothing wrong with taking a hit, be it in trading or in any area in your life. Just know that when you do, probability is always in your favor and probability says you will get back up again. The trick is to believe it and know it with all your heart when you are down.  If you can do this, it will make a HUGE difference. So right now, I have stumbled a bit with the trading, but this is going to happen and is par for the course. I am not down about it, I'm just super excited to get back up and get back on track. 

You are going to get knocked down. But always know the tide will turn back in your favor. Via @joelkruger

AUDNZD - As far as the trading goes, AUDNZD is finally starting to show signs of basing out after waiting forever (as is usually the case with this one) for this to get going. On Wednesday, with the trade back near cost, I decided to halve my exposure to give me cushion to buy more in the event of another dip. I LOVE the trade but always like the idea of having some ammunition and into Wednesday, I was fully committed and didn't have the ability to increase exposure. So now I remain net long from about 1.0540 and have room to build back if we see a decent dip. The trade is looking pretty following this latest bounce and should really begin to make its move significantly higher in the days, weeks and months ahead.

THE BATTLE - The only other exposure I have now is short SPX500. I continue to see this market in the process of rolling over and carving a meaningful top, but this has been the battle of battles. Ideally, the market now has a very hard time trying to establish back above 2100 and we see a breakdown below key support at 2065 in the sessions ahead. But if we don't, and the market breaks back above 2100, I will be forced to take to the sidelines as per instruction in the trading journal. To me, the technicals and fundamentals are highly supportive of a bearish reversal, but with this one, there are other forces at play, which make the trade a little more difficult to wrestle with. I love the short but let's see. 

It Hasn't Even Started

I'm looking for quite a bit of USD weakness in the months ahead and right now...


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SPX500, Yen and Euro

Here's a look at the downside we could see in US equities and how this, along...