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Currently 225 pm CST, All the grains were in the red today, as we saw sympathetic moves with the outside markets… the Dow is below 9500, the spoos are down 20 handles at the 1030 level, gold is back below 1000 bucks and silver is down around 16.50, the only higher market is crude, hanging in there above the 70 dollar level, mostly due to yesterday’s surprising gas stocks shortfall.
So over all a day for the bears….
I honestly was surprised, after yesterday’s bullish bounce in the stock indexes, that today they would have given up those gains and more. Just goes to show that your opinion and 2 dollars will buy you a cup of coffee.. proper trading discipline assures that if you are wrong 60 to 70 percent of the time, yet manage those losses well, while allowing your winners to run, over time, your opinion is just a mechanism to get you into the market with a position and an opinion. The key, which is very hard to master, is disciplined loss taking, and even more discipline in letting profits run.
Human nature is your enemy in this game, unfortunately. If it wasn’t then everyone would be Jim Rogers, Julian Roberts or Monroe Trout or Ed Seykota or Stanley Druckenmiller..
These are giants who were and are able to consistently follow that one very simple rule.
After trading professionally for over 15 years, its the one absolute necessity… knowing how to take your loss… Every day I would write on the top of my trading card discipline, three times… even then It was a struggle against nature to not want to hold losers too long, or get out of winners too fast.
Screen based trading requires you to be extremely selective and very patient… A difficult transition for floor traders who were mostly add/hd type persons, or at the very least type=a personalities.. IN order to be successful in this business you must keep ego in check at all time, almost being mechanical in your adherence to that mantra ‘cut your losses, let your winners run…’
In any event, these markets look funky right now, possibly over done on the down side. SX continues to bounce between 905 level, roughly and 930, not seeming to be able to make up its mind as we go through harvest now. Especially with all the reports of very high yields, in both beans and corn weighing on prices with this increased supply.
With volatility, comes opportunity, but also tremendous risk… I would caution against getting either too bearish or bullish as we work our way through October, a historically volatile month for stock indexes in particular.
C