Tweet compilation, Part 3
This post is the next batch of tweets related to my strategy and mindset. It’s quick snippets of info that serve as good reminders for me.
Yet another example of why we follow price not CNBC: In the media, Druckenmiller has been emphasizing how bullish he is on commodities. But 13F filings show his portfolio is >50% in tech/growth names, and <10% in materials/industrials.
Trades fail all the time, it's part of the game. This is not a worry if you get a good entry, have a well-defined exit price, and have proper position sizing. If you instead YOLO'd into something based on news/emotion, then you should be terrified.
Yes, life's short, but taking shortcuts (eg. Forcing trades, excessive position sizes, etc) will end up taking longer to reach your goals.
The physically strong thrived in the old world. The mentally strong thrive in the modern world. Logic/numbers/patience.
If you want lots of followers/newsletter subs: make bold predictions, do complex analysis, pump volatile tickers, etc. If you want to make money trading, don't do any of that.
narratives, opinions, predictions, news, politics ❌ Price action ✔️ telling the market what to be doing ❌ doing what the market is telling ✔️ intraday charts, fancy indicators, diagonal lines ❌ weekly charts, price only, horizontal lines ✔️
If markets stress you out, either your timeframe is too short, method too complex, position sizes too big. Simply follow breakouts in leaders. Above line good, below line bad. Doesn't have to be any more complicated.
Trade long enough, and the market will cleanse your bad habits and bad ideas. Bad habits: emotions, fighting trends, impatience, seeking opinions. Bads ideas: no proven strategy, data mining/complexity, irrelavant data points.
How cool is it that experts from every field share all their life's work and lessons in a book that usually costs less than $20?
If it goes up, great. If it doesn't, can find opportunities elsewhere. Never a need to get tied to one asset/sector/stock or root for an outcome.
Traps: - Fantasizing where markets will go - Intraday charts - Fancy indicators - Intermarket correlations - Fighting trends - Seeking confirmation
Breakout trading is like a call option: unlimited upside, limited downside. Except, the option premium is the stop loss, and there is no option expiry.
In markets, you don't need a fancy degree or tools. Following trends and sitting tight will make you look like a genius.
Wherever the world decides it wants to go, i'll join along for the ride. Whether that's stocks, rocks, blocks, or crocs, I don't care.
You can have a correct narrative and still suffer a loss. You can have a wrong narrative and still make a gain. So why not just focus on price?
In your trading journey, let your creative mind explore what it wants to. Read, accumulate ideas, and try different approaches. Write about them. Then weed out stuff that doesn’t work or suit your personality. Keep simplifying until you’re left with a barebones approach.
Just because it's a seasonally strong period doesn't mean there can't be big corrections (red lines). And a seasonally weak period doesn't mean there can't be nice rallies (green lines). Focus on the current price action.
Would you treat a breakout from a 'head & shoulders' base any differently than a 'double bottom' base? Of course not. Then why bother with these silly patterns? Simplify.
Important Disclaimer: This blog is for educational purposes only. I am not a financial advisor and nothing I post is investment advice. The securities I discuss are considered highly risky so do your own due diligence.