≈ Good trading is not about being right. ≈
So you want FAT returns over your capital. Greasy and juicy returns.
And for that, you want to deploy just the right amount of capital. Rounded. Precise. Preferably small. Tiny.
And you want it fast. ASAP. “I want it all and I want it now”, like Freddie.
Who doesn’t?
Sorry to put the finger on the vinyl record and stop the music: that’s just not possible.
Fat returns are, by mere application of logic, rare events.
You will catch those rare events, but only if you try. And fail.
try › fail
try › fail
try › fail
try › slim ROI
try › fail
try › slim ROI
try › fail
try › fail
try › fail
try › FAT ROI
Curtis Faith wrote in his book “The Way of The Turtle”:
“Table 4-1 shows the cocoa trades one would have encountered by trading breakouts from April 1998 until the trade with the large trend occurred. Note that there are 17 losing trades in a row in the cocoa market before a very sizable winning trade that started in November 1998.”
Don’t be fooled: this was all part of his system. Nothing random to be seen here. Begin by comparing the size of the losers to that of the winners.
If you have PANIC of losing money, you will never trade. If you never trade, you will never get the FAT ROIs. That’s a mere application of logic.
In a way, you must love losing money.
Chart of the Day
Table 4-1
Table 4-1 is today’s chart of the day. Curtis was one of the Turtles from the first class. Let’s learn from the man himself. Seventeen losses in a row one would’ve encountered until BAM! The fat and heavy ROIs on four of twenty-eight trades, beginning seven months later.
Video of the Day
Pre-Defining Risk
Coach Noah Davidson explains the importance of defining risk before placing any orders, even more during high volatile markets.
Today’s Lineup
OPTIONS THEORY
The Straddle Temptation
Generally, I’m not a fan of the trade because it is difficult to make money with. Most of the time the market moves less than expected. The straddle wins if options were priced too cheap. And, well, most of the time they’re too expensive. But here’s a back of the envelope method to figure out if the strategy is tempting. Compare the straddle cost to the Average True Range (ATR).
Traders Lounge 11am 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 Replay
If you missed last night’s episode where Coach Gino Poore talked about How to use volatility to cash flow or would like to watch it again, check it out here.
Halftime Report 12:30pm 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.
Market Recap 4:30pm EST
The Market Recap is designed to give you a quick overview of the day that was. While brief, this report is designed to cover all of the major events that drove the markets that day and help you plan for the trading day ahead.
