As a newer day trader with roughly 1 year of experience, I am learning to trade big events with caution. Trading through two major world events of Brexit and the most recent US Election has taught me not to anticipate but trade the action. Each day no matter what you must trade what the market is doing and how it is reacting instead of what you think it will do.
It was interesting to see the market react ahead of the the two major events and price the reaction into the market. With Brexit the markets anticipated Britain staying and so the market rallied and then the news came out with a reverse result and boom the market reacted with a drop.
Well the same is true for the US Election. When Hilary was announced to be investigated by the FBI the overall US markets began declining. Then the FBI cleared her and the markets began to rally again. As you can see from the chart about the market sentiment was that she was going to win and the market would recover. All was going well until the Election results started coming in.
I know of futures traders that banked big time on this one event. They sold short before the results and once Trump was leading the market futures began to drop down to the almost limit down maximum of 5%.Which would have potentially halted the markets for the next day. So When I went to bed around 2 am the markets were down roughly 4.6% I think it might not have been the fact Trump was leading but the uncertainty of the results.
Since this was the first time I had traded through and election and also a dramatic one at that I knew Wednesday would be a day to trade super cautiously. When I woke up I saw that A. Trump was the confirmed winner and B. that the futures markets had started to recover.
You can see just how volatile Tuesday night was on the chart. Looks more like an EKG reading than the type of chart you want for a major index. So it tanked overnight came back to open up slightly. Dropped off again and then rallied the rest of the day. A day of major extremes in the market and with my style of reversal trading a great day to capture the reversals. I traded both long and short positions on Wednesday.
It is definitely possible to profit in any market any day, but it is all about your diligence. The riskiest time to every trade is your entry. So you want to make sure that you have a good stop either mental or if you are like me and need hard stops then a hard one. Once it goes in your direction I like the strategy of using a stop to protect those profits if it flips against me or taking 50% off at a consolidation point and a stop for the rest to protect the profits. It is always better to take 50% profit at a resistance point than zero profit and have it go back against you for a loss.
There is no need to be a superstar and try to rock each and every trade. The best way to rock each trade is to take a profit on it. Big or small they all grow your account. That’s why I always say Carpe Profit. Be happy with any and every gain. Over time you will become better at understanding the price action and capture more of the move. The stops will let you trade cautiously while locking profits.
The biggest hurdle each trader faces is themselves. Managing yourself will improve your trading. That is why I partnered with Mandi Pour Rafsendjani and we are doing a very valuable 6 week live or recorded Webinar Training about Day Trading and Trading Mindset. They go hand in hand and in understanding yourself you will be able to be a better trader. A inexpensive investment in yourself that will only improve your trading.
If you have been following me for a while you know that I enjoy helping others improve. It is amazing to hear the transformations that I have helped to inspire happen. We can all do what we put our minds to on a daily basis when we direct our energy there. It is a choice of daily decisions. How bad do you want that change in your life. Like a couch potato at 400 lbs saying I want to lose weight and become more active but day after day the same habits of diet and exercise are there. We make choices with our actions and through those actions we see change to make our dreams come true.
When you have a dream or change in life you want to see, it starts with yourself. Your daily actions and decisions determing if you will reach that goal. Each little step will help you get there. Give it time, be kind to yourself and acknowledge the little achievements along the way. Each small one gets you to the end goal. Each day is precious and you need to be kind and positive to yourself to get your end result of happiness in life in whatever form happiness comes to you.
If there are any women interested in the Seminar in San Diego Dec 4th, where I have been asked to speak by Trade Ideas, you can sign up here.
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This blog is for information purposes I am not a registered securities broker-dealer or an investment adviser. The information here is not intended as securities brokerage, investment or as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund.