psychology of trading

I assume that most of you aren’t particularly thrilled with the market these days. I too have been working hard to book  profits – squeezing  blood from stones.

We knew it was gonna get tricky. We knew about it for weeks leading up to these “final days” before the dreaded “sell in May and go away” either takes hold…..or throws market participants (including myself) for yet another loop. Only time will tell.

The usual correlations we reference (in order to make sense of the markets) are out the window – we know this. The latest stream of  U.S data has been absolutely dreadful no matter how hard the media tries to find a positive spin – we know this as well. Global markets are enjoying the largest “money printing party” ever witnessed in the history of human existance as Central Banks around the globe do everything in their power to mask/support the illusion that “everything is gonna be fine” (or else – why would they be printing right?) – again…….this we know.

All said – one needs to consider their current investment goals. If trading is your thing then fine – you will “suit up ” again Monday morning and get back out on the field. You will do battle. You may survive or you may not, but as a trader you’ve got your short term vs long term goals in perspective and for the most part – tomorrow is just another day.

As an investor, I think things are much more difficult. You are compelled to “seek return” and likely “hate” seeing cash just sitting there – seemingly doing nothing for you. You need to be extremely careful as to not “risk too much”….. yet your near term investment goals “command” that you see a return. In all – you likely feel more pressure than the average “gun slinger” short term trader.

It’s a tough spot –  no doubt.

I’m not in investment advisor, but I would suggest that investors just take a deep breath – taking stock in the fact that “cash” is a position too.

In times of question “capital preservation” needs to be the primary focus – and with summer upon us I find it very, very hard to imagine anyone will miss any kind of major “upside suprise”. It’s hard to sit on our hands I know – but discipline and patience goes a long way.

This reminds me very much so of a story my father once told me of a young bull and his father –  standing on a hill.

Perhaps the gorilla icon and brief description on the “who is kong” page doesn’t really do much for you – and that’s fine.

You’ve chosen your side, whether it be that of the “eternal optimist” or the opposite – convinced  “the end of the world” is so soon upon us. Either way you’ve got your mind made up – and come hell or high water……. “you ain’t changin”.

But what if the environment changes?

Like a group of actors “teleported through the wormhole” in some crazy sci-fi adventure – you suddenly find yourself in an environment where the same tactics and philosophies just don’t seem to apply.

Would you consider change then? Would you have a choice?

Do you have a choice now?

Is it “so unlikely” (considering the world we currently live in) that it’s the “investment environment” that is changing so rapidly – and that essentially it’s “up to you” to find a way to change with it?

I’m tired of the bull vs bear argument, and the gorilla originated with the creation of a trade animal that was able to trade without bias, to adapt to environmental changes as they came. A “third” player at the table as it’s all too certain the markets have pretty much got the “bull vs bear” thing figured out no?

NASA announced today that Kepler (its alien world-hunting spacecraft) has discovered two previously unknown planetary systems, including three super-Earth size planets in the much-coveted “habitable zone”  – capable of sustaining human life.

It’s really only a matter of time now (with such advancements in technology ) that we finally put to rest the age-old question of our human origins, and make the “connection with the stars” as did our ancient ancestors.

Putting things in perspective – there are more stars in our universe ( each with their own planetary systems ) than the combined total of every single grain of sand on the entire plan Earth. The discovery of these two “Earth like planets” is only the beginning – as we continue to reach further and further out. We will find life – and we will find it soon.

It’s things like this that keep me small, humble. We get wrapped up in our day-to-day lives, the decisions, the stress, the pressure we may put on ourselves, when in the grand scheme of things – we’re not just a tiny grain of sand, but one of billions of tiny people – on that tiny grain.

Consider the significance of a poor trading decision. One decision….. in a day filled with decisions, in a life filled with decisions.

I’m pretty sure you’ll be O.K.