Attitude, Chuck Swindoll: This may shock you, but I believe the single most significant decision I can make on a day-to-day basis is my choice of attitude
…. Attitude is that ‘single string’ that keeps me going or cripples my progress…. When my attitudes are right, there’s no barrier too high, no valley
too deep, no dream too extreme, no challenge too great for me. Yet, we must admit that we spend more of our time concentrating and fretting over the
strings that snap, dangle, and pop–the things that can’t be changed–than we do giving attention to the one that remains, our choice of attitude.
Trading can be a demoralizing occupation, if you take it personally. The market is not personal, it might be emotional, but it is not personal. There is
rationale for what happens over the long term but in the short term it can be emotional. Sure there are times when it seems like it is completely
irrational like when it moves down on news that should make it move up or up on news that should make it move down. But over the long term it is typically
Recently there have been companies that missed earnings. Their stock price dropped but as the market moved up, their stock moved up with it. We are in a
bullish phase of a bullish market. What do I mean by that? Well for me the market tends to repeat itself. This time of year the market tends to be bullish
until spring. Sure there will be some times when the market pauses or even drops but it is typically higher by the spring. That will typically make the
vast majority of stock prices rise. So even if a company misses earnings, it will return to a bullish trend.
The same is true of bearish market. Back in 2008 and early 2009, the market was dropping. It really didn’t matter what earnings were for a company. They
could have fantastic earnings, the stock price might move up for a short time but it would quickly be overwhelmed by the bearish market and move down. So
how is that rational? Short term it isn’t but when the bearish market ended in March of 2009, those stocks outperformed the market.
With options you can trade any time period you like. Most of the skills used to trade short term are the same ones that you would use to trade longer term.
The best thing to do is to figure out what time frame works best for your style and your equity. I have trades that last about 2 weeks and others that last
9 months. The long term trades are extremely reliable and have returns that are low by options trading standards but unbelievable for those not familiar
with options. The short term trades are less reliable but have significantly higher returns.
“My philosophy is that not only are you responsible for your life, but doing the best at this moment puts you in the best place for the next moment.”
— Oprah Winfrey
I started this blog with a quote about attitude. You pick your attitude every day when you wake up. You can be angry, defeated, pessimistic, demoralized,
OR you can choose to be happy, determined, positive and confident. Now if you are consistently losing money, it is time to examine what you are doing.
“Begin challenging your own assumptions. Your assumptions are your windows on the world. Scrub them off every once in a while, or the light won’t come
— Alan Alda
If you are having a problem staying positive here is something to try. Help someone, anyone. It does not have to be a big thing. Hold the door for someone
and smile. Call your mother! If your mother is mean, call my mother. She is a delightful person and is very willing to talk on the phone. Let someone merge
in traffic. Stop for a pedestrian in a walkway. Or maybe go big and pick up a check for someone. Call someone who you have meant to get together
with and buy them lunch. Or go even bigger and make a donation to a charity. Maybe sponsor a child in a third world country. You’ll be amazed at how it
will help you change your attitude.
This seems to be the best time of year to do something nice but any time of the year is a good time of the year to do something for someone else. So when
you need an attitude adjustment, do something nice for someone.
The market doesn’t know you or how you are trading. It doesn’t want to take your money, it doesn’t want to make you feel bad and it doesn’t want to make
you feel good. How you feel about the market is your choice. It isn’t a charity so don’t give it a donation. Plan your trades and trade your plan.