Watching The Usual Suspects
Nice to see the Nasdaq
up, if not "running," after what was the craziest week this
trader has ever seen. While many folks were likely watching on the sidelines to
see if the Naz could simply stay plugged in, there were a few opportunities for
the nimble. Emerging three-minute stochastic strength, an MA cross, and pullback
to support provided the market’s version of Tinker-Evers-Chance (that’s a
powerful baseball double-play combination for those not familiar with baseball
history) and three separate opportunities on this July Monday where I
frankly expect opportunities to be very limited. While I’ll be watching all of
the usual suspects (MA supports & crosses), I expect to be trading extremely
lightly today and throughout the week given the lack of liquidity, and perhaps
more importantly, pace. On days like this it is critical to be exiting into the
supply while available.
A Skill
Profession
A quick note as we begin to fire up the
barbeques. I believe intraday trading is one of the most difficult endeavors one
can attempt to master. When I left a very successful executive position in
the corporate world to pursue trading, it was largely because trading was the
most challenging craft to which I had ever been exposed. Call it my personal
Mount Everest. I say "craft" because I believe successful trading
requires a unique blend of skills much like those mastered by other
"craftsmen and -women" who get fairly compensated for their unique
abilities…pilots, surgeons and professional golfers are some that come to
mind.
Like those mastering flight, surgery and Augusta, successful traders have
acquired a keen ability to process multiple variables simultaneously on the fly,
a willingness to act with far less than 100% certainty, strong personal
conviction, effective hand/eye coordination, finely-tuned reflexes, tremendous
mental discipline, a sharp awareness of risk management, and perhaps most
importantly, an ability to channel 100% of their being to focusing on a skill.
That’s right…a skill.
In my view, trading is all about…and only about skill. Period.
Exclamation Point.
I like the golfing analogy often because trading and golfing concepts are very
similar. Think about it. Skilled professional traders are exactly like golfers
on the PGA tour, in that both are able to sustain themselves financially only
because they’ve developed a very unique skill that most can’t master, either
because they get too frustrated, or because they’re simply not wired to be able
to make it happen. (Take it from a pretty poor golfer…why do you think I
trade?) And just as tour pros focus solely and intensely on the next shot or
shot sequence, skilled traders must do precisely the same…without reference to
emotion, earnings, yesterday’s results, that last trade, etc.
If you’re struggling or in a slump, consider channeling all of thoughts back to
simply executing the skill…one trade at a time.
See you on the links. I’ll be the guy in the sand.
For
a more in-depth look at how Don trades the QQQs, click here.