Tackle Today: “I am Old & Bold.”
February 6, 2020
≈ Said no one ever. ≈
There are a few sayings Brazilians use to explain things no one has ever seen (I bet every culture has its own set). They are funny in Portuguese, let me know if a free translation will kill the funniness. Here they are:
- Codfish head;
- A baby pigeon;
- A picture of a mother-in-law in someone’s wallet;
- An honest politician.
The stock market has its own baby pigeon, its own codfish head, its own mother-in-law picture in a wallet: old, bold traders. No one has ever seen this specimen around. They only exist inside the imagination of reckless traders. To them, capital preservation is something they don’t wanna hear about; that’s for mom and pop.
It really doesn’t matter which system you are used to trade or what strategies you like most; Delta, Vega, Theta, single or multi-legged. Market conditions don’t matter either. With that being said, there is one thing that ALL systems and strategies have to have in common in order for you to become an old trader: Risk Management.
Traders seem to be always looking forward to incorporating the newest cutting-edge EDGE to fit into their trading bag of tricks. In a market that works on high daily doses of Xanax & Coffe, two simple things like POSITION SIZING and RISK-REWARD RATIO can work wonders.
Remember Coach Slawek’s rules?
- Trade small, win big.
- Find tight entries for your size.
- Know what you are risking when getting into the trade.
- Always use stop losses, because mental stops never work right.
- Never average down, unless you have a plan for it.
Simple, right?
Bold traders never get old, I suppose. They just turn themselves into baby pigeons.
Chart of the Day
The Cheetah Runs
Tesla (NASDAQ: TSLA), the most shorted stock in the US, is taking its revenge against those who have been swimming naked.
- TSLA’s high on Feb 4th: 968.99
- TSLA’s 200-SMA level on Feb 4th: ≈298
That’s what you call a spread: ≈225% difference.
Video of the day
Trading Concept Check: The importance of good risk management
The importance of good risk management cannot be overstated. There are old traders and there are bold traders, but there are no old bold traders, this popular idiom cleverly informs us that those who over position size and fail to use stop losses will not be traders for long.
Traders Lounge 11 PM EST
Join the coaches in this live lounge, ask questions, discuss ideas or just sit back and listen to veteran traders discuss market conditions.
Cashflow Club 8:30 PM EST
Held every Thursday before Friday’s option contract expirations, this show helps you perfect your favorite cashflow strategies.
Halftime Report 12:30 PM EST
The Halftime Report starts at 12:30 EST and covers what news is driving the market, chart analysis from the movers and shakers of the day and fun in a way that only Matt and Tim can deliver.
Financial freedom is a journey
The Tackle Today series is brought to you by Tackle Trading.
Sign up now and gain unfettered access to all of the quality content and powerful Scouting Reports that our Pro Members enjoy for 15-days absolutely free with no strings attached and let us show you what your trading has been missing.
# Sign up now for a 15-DAY FREE TRIAL #
Legal Disclaimer
Tackle Trading LLC (“Tackle Trading”) is providing this website and any related materials, including newsletters, blog posts, videos, social media postings and any other communications (collectively, the “Materials”) on an “as-is” basis. This means that although Tackle Trading strives to make the information accurate, thorough and current, neither Tackle Trading nor the author(s) of the Materials or the moderators guarantee or warrant the Materials or accept liability for any damage, loss or expense arising from the use of the Materials, whether based in tort, contract, or otherwise. Tackle Trading is providing the Materials for educational purposes only. We are not providing legal, accounting, or financial advisory services, and this is not a solicitation or recommendation to buy or sell any stocks, options, or other financial instruments or investments. Examples that address specific assets, stocks, options or other financial instrument transactions are for illustrative purposes only and are not intended to represent specific trades or transactions that we have conducted. In fact, for the purpose of illustration, we may use examples that are different from or contrary to transactions we have conducted or positions we hold. Furthermore, this website and any information or training herein are not intended as a solicitation for any future relationship, business or otherwise, between the users and the moderators. No express or implied warranties are being made with respect to these services and products. By using the Materials, each user agrees to indemnify and hold Tackle Trading harmless from all losses, expenses and costs, including reasonable attorneys’ fees, arising out of or resulting from user’s use of the Materials. In no event shall Tackle Trading or the author(s) or moderators be liable for any direct, special, consequential or incidental damages arising out of or related to the Materials. If this limitation on damages is not enforceable in some states, the total amount of Tackle Trading’s liability to the user or others shall not exceed the amount paid by the user for such Materials.
All investing and trading in the securities market involves a high degree of risk. Any decisions to place trades in the financial markets, including trading in stocks, options or other financial instruments, is a personal decision that should only be made after conducting thorough independent research, including a personal risk and financial assessment, and prior consultation with the user’s investment, legal, tax and accounting advisers, to determine whether such trading or investment is appropriate for that user.
