If you have been paying attention to the stock market, then you know that recently it has been CRAZY! Let’s walk through how you should be approaching your trades and what skills you need to survive.
This podcast and information was recorded on August 27th, 2019. You can also listen on Spotify, iTunes and Stitcher
The market right now is up big one day, then down big the next day. You are getting whipped so you do not know whether to go bullish or bearish – especially if you are new to the market.
That is why I am here:
To have a conversation with you and talk about the market and what’s going on.
One of the members inside our community and educational forum, Power Trades University, said about a put option trade that was woking “I hate bear markets, even when I am making money to the downside. Because I have a 401K and you just watch it get destroyed and there’s nothing you can do about it.”
With a 401K that is so true… you only have the strategy of buy and hold. You can only hope that the accumulative stocks is higher than when you bought them.
I personally have an IRA, so I am able to sell options against the stock I do own. I can buy put options… I have way more choices than the average person.
The average person does not have the same tools when you take the leap to manage your account yourself.
But the STATE that we are in with the Stock Market is:
High volatility and uncertainty
Information is flying so quickly, and we have never been in a time where the President can send a tweet and immediately the stocks go down. So it is literally minute to minute with the stock market!
This is not the time to be a “hero”.
A “hero” is someone who thinks super short-term. They will try and come in and try to make all of their money right now at this time. They come in with their cape and they are excited, but this is not the time to save the day and their account. Typically, they end up blowing up their account.
The Mindset You Need to Have
A. Long-term
Think in terms of trading with a 6-12 months time-frame. And look at good companies, ones that once tariffs and trade wars blow over, will not being affected. What companies do not use China as a manufacturer? Go from there.
B. Super Short-term
This market is a day traders heaven – because you can jump in and out of things every single day! An enemy to a day trader is when the market is stagnant. I am not a huge fan of day trading, because typically you need to be in front of the computer a lot more throughout the day and the pay-out isn’t as high.
C. You have to be an Options Trader
If you can only buy and hold stock – you only make money from the market going HIGHER. But right now they are all over the place! So you will be able to actually make money even if the stock FALLS down. And you can do that with options trading.
Have no idea what option trading is about? You can learn with my free webinar Options Trading Training, click here to register for it.
I personally chose to do all 3. I am using some of my account to trade over a long period of time, even selling options against it. I am also involved in some short-term stocks, where I am making money even when the stock falls with put options. And in both cases, I am using option strategies.
What’s Making the Market Move Right Now
Tariffs
When the President imposes a tariff on a country, it means everything that is brought in to that country includes a tax. Companies may “eat” that price and cover it themselves, which causes them to lose money and that is reflected in their earnings. Now the fear of recession is on the line, because they may need to change their business strategy and have to lay people off to cover these costs, or not invest in their ideas that they had previously.
The market is forward thinking and concerned with these events.
What is the Good News?
This is the BEST time to learn. You never want to feel like you do not have any choices other than watching your money decline, like our member with the 401K account. It so important to LEARN how the market works and the strategies you could use. You can even do thinks to protect your 401K!
THIS IS THE TIME TO LEARN.
People may say “See? This is why I don’t get involved” when the market acts like this. But if you think about it: Is everyone losing money? Or is it just the average person who does not know how to deploy these strategies?
It is NOT bad times for everybody.
I am up in my account year-to-date, I am up in some trades right at this very moment.
You do not have control over who becomes President or not, or the world events around you.
But you DO have control over the strategies you can deploy when volatility hits. You do have control to gain the education needed to navigate murky waters.
What are you going to do, just never invest when things get tough? More than likely, things will always be a little tough.
Now is the time to learn.
If you resonate with my style of teaching, check out the education we have at Power Trades University. If you don’t – no problem. No matter what, I want you to succeed. So find an educator whom you like and run with them.