Life relates to trading and trading relates to life. Constantly revealing, unfolding before us as we trade and live, so I write about how my life relates to trading and how I trade the markets. Along the way I share my opinions on anything that evokes my passion or tickles my funny bone trying not to forget that enjoying life is the best part of living.
AAPL was holding up most of this market for the last quarter in my opinion and I was saying it on some of my outlook reports on YouTube. I also used to say, and got often hammered for it, that Steve Jobs was a marketing genius and the one who was behind AAPL's success as a result. A few times I also mentioned that all kings of mountains eventually have to crumble just because they stick out to be competition targets.. RIMM was mentioned by me as an example among others, like Nokia, Motorola. But, alas, some people kept thinking I was nuts or worse. I, on the other hand, thought that many were blind to the cultism that AAPL products became, which drove much of its sales. AAPL and Steve Jobs were both thought of in the same breath, therefore I wrote some articles about the possibility of more difficult times ahead if and when Steve Jobs moved on.
I never took away from the fact that AAPL was a good product and that their product filled many needs, but in some things I'm a realist and not a romantic. Inventors and inventions in entrepreneur hands tend to make my vision realistic. There are many people out there with a better wheel perhaps or need for no wheel pretty soon, and that is when the future becomes the past. Horse buggies too had their day in the sun.
Now, today, we had an earnings miss, with outlook down, which dropped AAPL 40+ points from day's high. I'm not gloating, it happens that way and kings don't get toppled easily, so I'm not saying it's over by a long shot. Still we all have to remember that Steve Jobs' marketing genius is no longer in play, and Tim Cook still has some proving to do to satisfy not only the cultists but the shoppers who are now looking for more bang for the $buck as the economy falters ever lower with USA being still the last best hope.
Which also reminds me that we need to remember this is an election year. Part of the agenda is to make it worse before better, if the economy looks really bad now and the rescue comes, all will breathe a sigh of relief? Buy into the "hope & change" again? Look to the king and kingpin Bernanke to make sure that by election time we can be "green at any cost" and AAPL will rise again.
Welcome to the second week of Trader's Study Friday where we continue to examine the do's, don'ts, trippin' points and places in the world of trading. In general, the mechanical and psychological journey of trading.
Today I'm featuring Gerry Rafferty the Scottish singer, songwriter with a soft voice, powerful messages, yet easy melodies. A type of teacher who you may not mind reminding you about things you have forgotten. He had a spirit and a soul that marched to a different drummer when it came to the music business. He did not like fame and he wanted to be respected for his music and creativity. He received both. His second solo album, City to City, toppled the Saturday Night Fever soundtrack in the US, July 1978.
"Baker Street" Is Wall Street your Baker Street? Used to be easy but now you're crying? Never assume that Wall St. is "easy street". Find your way to a class or a book to learn and to keep on learning.
"The Way That You Do It" Charts have a way to tell you when you got a trade right or wrong. A way to leave you with no doubt. It can help you stay in a trade and show you when to leave it. Reason to believe that everything can be. They come on strong
"Night Owl" Do you stay awake at nights worried about your positions? "You've seen it all and before and like a fool you come back for more" Sound familiar? Don't get lost in dreams with shadows, use your nights to study and prepare for the next day, not for worry. If you prepare, surprises won't keep you up at night. Otherwise you will only repeat what you have done in the past.
"Can I have My Money Back" Practice your trading methods, strategies, style first on paper. There is no way to get your money back in trading once gone, and preservation of capital is of utmost importance.
"Get It Right Next Time" Resolve to learn from trading mistakes and to do it right the next time and keep your resolution! If you do not bounce back from a bad trade you will continue to spiral downward in spirit and method. Keep studying and learning; the light will eventually become brighter.
"Don't Give Up On Me" Don't give up on yourself. Not every idea, strategy or trade will work in your favor. Recognize & love your mistakes. It's important to keep a positive attitude. Know that it took a long time for each and every trader to become a success and admit that you will not be the first to feel that the market is against you.
"Take the Money and Run" When at first you succeed, this is the tempting way to go. Develop your own strategy to keep your trade going for best gains. Study your exits at least as much as you study your entries.
"Change of Heart" Nothing wrong with a changing your mind when trading. Market rhythms change and so should you along with them. Often traders hang on even when writing's on the wall to be dragged down with the trade. Not surrendering a bad trade is what makes most traders fail.
"It's Easy to Talk" and harder to do, but don't marry your trades. They'll break your heart every time and may even kill your ability to trade. Always remember there is another day and time you can meet again :)
"Home & Dry" Is how you will find yourself when you follow your plan and do everything just right. When you do, study it too. Especially because it was the "perfect" plan. Learn from what is you did right as well as what you did wrong.
Remember that we all struggle with our chosen lifestyle, and it takes courage and perseverance to keep on going when we love the life we have chosen.
*****Not everyone can work the action on earnings plays. It takes extra hard determination, steel will along with total commitment to stick to what you see and keep the rules. It can also bring gain and loss with equal speed in the same split second.
Trades on earnings are just too quick to enter as the announcement is released. Most people play it as pure reaction and don't plan their plays, but I say you have to let it unfold to your plan. As the announcements are released, wild fluctuations can happen and deciding your trade at that time becomes emotional as well as nearly impossible. Trading becomes fast and momentum furious. So as you quickly try and catch a trade you may end up missing the action at best or far worse, getting a fill that is way off. The execution is important.
My Earnings Play list is planned before announcement and allow for a possible hit long or short without triggering the opposite play. Targets are planned according to possibilities and not dreams. In other words, I have a price target set up as well as an entry target. The idea is to not shoot the stars or the moon but to find a realistic target price, set it up and let it play out. Then be sure to manage the out well, based on what you already determined prior to the action.
Like in all trading styles this too takes practice. Learning to set up the entry and exit is the best friend you can have which is part of the preparation. Then, once the trade is entered, it is important to say in the moment because it's where you have most control. Stay in control of your emotions, and your targets; know what you want, don't let that target fluctuate. You are allowed to change your mind and take a lesser target on your list, but allow for the play to continue and use the lesser target for your stop. Just know that the more you control your trade the more satisfied you'll be with the outcome.
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