Grim Reaper, Volatility, Poker and Trading


NO BIG DEAL - Monday is already out of the way and it's a very short week of trading already. Remember, once we get through Wednesday, and even Wednesday, it will all start to thin out as US desks race off for the Thanksgiving long holiday weekend. Of course, this also means that today and tomorrow could pack a punch. We do get the Fed Minutes tomorrow and while that rate hike next month is all but priced in, there is sure to be some more information the market will use to try and figure out what it all means as far as the timing of the normalization process goes from 2018 and beyond. I had said on Monday that the market was probably making a bigger deal of the Germany political story as it had done, and that's exactly how it all has played out, with the Euro recovering from the setbacks and moving back to focusing on other things. Now other things could weigh on the Euro, but it shouldn't come from this story. But as per my outlook and positioning, my bias is not favoring the USD bearish side of things.

cartoon nov 21

NOTHING CHANGES - This is a great time of year. It's a holiday week and we haven't seen any big moves as of yet, which leaves me keeping the updates short and sweet. My goal has always been to hit you with value add while sparing the stuff you can get everywhere else. As far as the price action goes, EURUSD is between 1.1880 and 1.1555, while GBPUSD is between 1.3340 and 1.3025. And while we're stuck inside these levels, there's nothing to talk about. I continue to say that it is going to take a big move to the downside in the US equity market that will finally free the market from the chains of a global central bank policy that can probably best be described as the Grim Reaper of volatility. And so we wait. It will happen. But we are happy to wait. As human beings, we are always shocked at how a situation can look like it is completely different, even though it is just the same thing happening again and again, only manifesting in different ways. Sure. We adapt. And because we adapt, the bubbles get a little bigger. But the result it always the same. So we wait.

It took a while, but this is a huge lesson when it comes to trading...and it involves #poker too.

POKER - Ok...let's move onto to a little more trading psychology. We just hit the topic above with respect to the cycle of things, so let's keep it going and move to poker. All of these years, I've spent so much time comparing poker to trading with respect to the discipline, risk management and ability to read situations. And all of this is true and important. The funny thing about it is, I completely missed the most important thing about this comparison, that is truly unique. When we think about most things that we participate in, there is always this reward for being active and involved and a negativity about sitting out on the sidelines. It could be anything really, but sports is perhaps the best example. When we play sports, we are awarded for getting out on the court or field or pitch or ice or whatever. That is where the glory comes. Sitting on the bench is not a good thing.

THE REVELATION - And yet, when you think about trading and poker, there is as much, if not more respect for someone who is able to sit on the sidelines. In these two, you're encouraged to sit back in order to be even better at the craft. I think this is very important as it highlights one of the reasons so many aren't able to progress as traders. They believe they need to always be out there taking positions. And so, if you're able to internalize what I'm saying here, perhaps it will give you a newfound appreciation for what it is you're trying to do and a better feeling about yourself the next time you hold off from hitting that button when you really don't need to be.

Currency Pairs

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Key Focus into Friday

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Thursday Charts

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