Is it the END of Options Trading?

 You put on what you think is a great trade and the next day it does a loop-de-loop.  As the kid in me would say “What the Fudge is going on?”

See what is happening in this week's video

For the past two years, the problem for most traders This is happening over and over.  You get discouraged.  You start doubting your ability to trade.  And some of you just plain old give up.

Great traders adjust to what’s new and they adjust quickly.  So, let’s get you back on the great trader pathway.  I want you to say the following out loud with me

Trading is fun.  

What makes it fun is it is never the same day-to-day and year-to-year.

I am a great trader. 

I know when to enter and exit trades.

I am a Great Trader

Saying affirmations out loud conditions your mind to accept and believe them. When we say words out loud, we form auditory links in our memory and subsequently, this leaves a trail in our subconscious and becomes embedded in us. 

While writing down positive words of affirmation or saying them in your head is all well and good, it will take a long while to form links in your memory pathway. 

This is why saying them out loud is the best way even though it may feel weird the first few times you adopt this new style.

Let’s get back to “What the fudge is going on?”

The last couple of years economic announcements have jolted the price action of stocks and the Market as a whole.  In prior years there might be, and I use the word sparingly, might be a small blip with an announcement.  But these days the reactions are deep and long lasting and definitely not easy to judge how the trading herd will react to them.

We are going through a period of fear.

Fear about the economy

Fear of inflation

Fear of our money not being enough to maintain our lifestyle

And for me fear of what the next unknown will disrupt my trading and my life.

I know that this too shall pass.

So, I say to myself “I am a great trader.”  And what great traders do is first to understand the climate and then to deal with exactly what the Market is handing them.

The climate right now is we are getting blasted with economic news and the trading herd is reacting in fear causing chaotic reactions and very high volatility.  It is that simple.

The answer for me was identifying the cause

Then seeing the effect 

And finally, determining how to trade it.

Here is an example.  Last week was the jobs report.  The U.S. Bureau of Labor Statistics (the BLS) releases the Employment Situation Summary, better known as the employment, or jobs report, at 8:30 a.m. ET on the first Friday of every month. It estimates the number of people on payrolls in the U.S. economy, the average number of hours they worked weekly, and their average hourly earnings, along with several versions of the unemployment rate.

• number of people on payrolls in the U.S. 

• average number of hours they worked weekly

• average hourly earnings

• the unemployment rate

The jobs report is among the most important and comprehensive economic releases.  It the earliest to provide data for the prior month. Its numbers are hotly anticipated and closely parsed as a result. The report often moves financial markets and is used among other data by the Federal Reserve to assess the state of the economy in setting monetary policy.

Many investment firms issue estimates ahead of the report for the monthly change in nonfarm payrolls  and the unemployment rate.  

Though the monthly jobs numbers can be volatile.  They are a crucial economic indicator. 

S&P 500 Volatility Continues

As Investors Digest Latest Labor Market Data

You want to be a great trader.  Get a list of the major announcements each month and start studying the herds reactions and learn what trades work in the ensuing chaos.  That’s what we are covering on our Deep Dive segment in this week’s webinar. Cause and effect and how to trade it

DEEP DIVE:

Cause and Effect

How to Trade It

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