Ok, be honest can you believe it is December! We are a few weeks from looking at 2020 through the rearview mirror and what a year it has been. Is just me or did 2020 feel like a never-ending infomercial? Just when I thought I’d seen it all, the “but wait there’s more” voice had something else to share. We had not even finished digesting one thing before we were facing another thing. The social and economic challenges and adjustments we‘ve had to make have not been easy emotionally, physically and mentally. Since this is the last WIT blog of 2020 and it feels like we’ve been in this year for much too long it’s time to jet into 2021 so let us get going.
Trading can be frustrating. The idea of being able to generate income and make trading a business sounds great however the process to get there requires a lot of discipline and accountability.
When it comes to trading, it is very easy especially with the kind of year we’ve had to be set on a particular mindset and be fixated on certain things and miss opportunities right in front of us.
As an investor, I struggled in early March to maintain a long-term investor perspective as I watched stock prices plummet every day for a month. Then when the blood bath ended I found myself hesitating to increase my long-term positions as the market started to recover. The speed of the market and huge price movement swings up and down had me doubting my swing trading skills. Then there were the position trades oh boy! My RUT condors aka my mama bird got no mercy from the market at all.
My favorite TV show of all time is Martin and there’s an episode where Martins’ mom went out of town and she left her bird Ruby with Martin and his girlfriend Gina for the weekend. Gina accidentally leaves the window open in cold Detroit weather and later discovers Ruby is dead. Martin hysterical in Martin fashion asks Gina “why’d you kill my mama bird Gina! Why?” So now when the RUT condors get killed, do I my best “mama bird” impersonation and ask why the market had to kill my mama bird. Lol! Ok back to 2020! The market has settled down since those early days of Feb/March and as we look ahead into 2021, regardless of where you are in terms of the market, it continues to show us that our opinions don’t matter. You can be as bearish as they come but that does not mean missing out on bullish setups when you see them. So what if anything could one have done differently hindsight 20/20? Haha!
There is a life hack that was shared with me many years ago well before I was even trading about resources we all have and how we are to apply them. The concept is that we each have three resources. Some more than others but we each have some measure of time, treasure, and talent. With these resources, the idea is that we strive to increase and use these resources to the best of our ability.
1. Time – Increase the valuable use of your time
2. Treasure – increase the material resources in your life and use them appropriately
3. Talents – increase or multiply your talents
As I look ahead into 2021 and start to map out my goals, I looked at ways that I can increase these measures and how they can be applied towards trading.
1. Time – Regardless of how long you’ve been a trader, you have to dedicate time towards education and knowledge of what is happening around the financial markets. Expecting to be successful in trading without education is setting unrealistic expectations. It is easy to assume you can get by without dedicating time towards learning especially with how the markets have recovered. It is also important to make sure you have a routine to follow through with the trading part of your day. Use that time effectively. No distractions
2. Treasure – Have a plan! Don’t think that you need to have a ton of capital to get started. The goal is to increase and grow your accounts gradually over time. Set goals of how much you can add to your trading account each month and for how long. Now if you already have a significant amount to start that’s great! Make smart trading decisions to preserve it. Compounding your gains and maybe avoid withdrawing funds while you are still growing your account will accelerate this process.
3. Talent – The financial markets are forever changing and evolving and as traders and investors it’s our job to make sure we stay sharp and prepared to evolve along with the markets. If you only have one way to approach the market you are selling yourself short and could potentially miss opportunities. Practice trading different market conditions and strategies. You want to have enough tools in your tool tox. Your go-to may always be the hammer but one way your sink might have a leak and the hammer, no matter how dependable it has been in the past just won’t fix the problem.
No matter how 2020 started or ends for you, you made trading a part of your life, but it is not your life. Make sure you are carving out time to spend with your loved ones. Be good and do good and have a safe and wonderful Holiday Season ahead.
Before I officially sign off Ladies tonight we have our Women in trading webinar at 8:30 pm est. Click here for the link Women In Trading Webinar
Until next time Traders!
Emily Muiruri was born and raised in Nairobi, Kenya before her family moved to the US and settled in Maryland, Emily began her trading journey in January 2015 after 17 years of Property Management in the Self-Storage Industry. Like many new traders, Emily started off with directional trading strategies such as long calls, long puts and very little in cash flow strategies. Over time that has changed and now her core trading strategies are cash flow based such as are Covered Calls, Naked Puts, and Iron Condors. Though she is still a student learning and enhancing her trading skills, she has a strong desire to teach women to take control of their finances and become traders. Writing blogs is one of the ways she’s is looking to spread the word and get more women involved. Emily knows that with the right education and trading system women can be successful traders.
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