FOMC Jerome Powell Interest Rate Decision 9-18-19
SQ Square Inc Stock Chart 9.18.19
"Most traders lose money trying to avoid losing money." This quote is from one of my first trading mentors. And he was exactly right.
Making money versus being afraid to not lose it. We tend to start out aggressive in our desires and then dial back the intensity when we realize that trading is harder than expected.
We come this realization of course when we have losses and can't figure out profitability on our own.
In my experience most traders never fully accept risk. They only want to make money without experiencing potential loss. Smart traders, those who thrive, use losses and wins as feedback to create a plan. Something repeatable.
Losses in particular then must be separated into losing trades versus bad trades. They are not the same.
The trading plan and how you manage trades NEEDS to be very specific. Which is what brings me to this chart of SQ.
I initiated a short sale with a clear profit target and stop loss. And here's the point I want to make. My stop loss was on a CLOSE above $60. Very specific. The stock traded above 60, but did not close there. So I am still short.
If you find yourself getting stopped out of too many good trades, evaluate how you are accepting risk/potential loss. I'm willing to be a tweak here or there will allow you to stay in those traders longer.
Trading to make money requires more than simply setting targets. Go deeper in your feedback loop of what works and what doesn't. You'll be surprised how one small change can make a huge difference.
Have a great day.
Pete
Fed expected to cut rates
The Fed is expected to cut interest rates for the second time in a decade Wednesday, but Fed Chairman Jerome Powell is unlikely to deliver the message markets want to hear on plans for future rate cuts.
At the Fed’s last meeting, Powell rocked markets, sending stocks lower and bond yields higher when he described the rate cut as a “mid-cycle adjustment,” meaning it was not part of a larger rate cutting cycle.
cnbc.com/fed-expected-to-cut-rates-powell
Stock market’s eerie parallels to September 2007 should raise recession fears
Since last year real GDP growth has been slowing. The chair of the Federal Reserve has been signaling that, while growth is slowing, there is no recession risk and the Fed is forecasting continued positive growth.
Warning signs in the economy, including an inverted yield curve, have been ignored and stock markets continued to make new highs in July. In August a correction took a place and subsequently a rally ensued into early September. On September 18 the Fed is expected to cut
rates.
What’s so special about this? This is hardly news. Except that this paragraph would be as true for the U.S. economy and stock market in September 2007 as it is today.
marketwatch.com/stock-market-parallels-september-2007
From oil shocks to funding strains, Fed confronts new complexities
WASHINGTON (Reuters) – The Federal Reserve will conclude its latest policy meeting on Wednesday buffeted by conflicting economic data, under steady pressure from the White House for steep interest rate cuts, and confronted as well with an unexpected jump in overnight borrowing costs that may require action on its own.
