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This week the markets continued to climb the proverbial wall of worry as buyers took the QQQ’s to all-time highs showing once again that all pullbacks this year continue to be buyable.
The US indices are having a banner year with the SPY’s and QQQ’s returning over 20% and 25%YTD respectively. With just over 2 months of trading left in the year, there’s no reason to say it won’t end as a big year for the bulls.
This final trading week of October is shaping up to be a potentially volatile one as we have the FOMC announcement on Wednesday as well as AAPL, FB, and GOOG reporting earnings.
In this week’s video, I discuss the volatility in Bitcoin and cryptos and the importance of understanding your trading edge.
Watch this week’s Weekly Outlook video to see the setups and levels we’ll be watching.
In this week’s video, we look at the technical outlook for the VXX SPY QQQ IWM DIA EEM TSX TLT GLD SLV BTCUSD ETHUSD EEM and more for the week of Weekly Market Outlook For October 28 – November 1, 2019.
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In last week’s newsletter, I shared an article that described the pervasive nature of survivorship bias in the investment world.
This week I want to share a complimentary piece from MIT Technology Review that talks to the other side of that coin and that is the role of luck.
One of my favorite quotes goes like this “success in business is about staying in business long enough to get lucky.” Source – Unknown.
Any trader who has traded for any significant period of time understands that as traders the best we can often do is put ourselves in potentially winning situations while at the same time trying to reduce the downside risk.
Ultimately the market controls whether or not we make or lose money.
But as the saying goes, “as traders we have little control over the profit we can make but we have 100% over the losses we take.”
So in order to stay in the game long enough to get lucky, you need to make sure you are only making 1 of these types of trades.
That’s it. Never put yourself in a position where you can lose a lot of money.
In time, if you have a proper method with an edge you increase the likelihood that lady luck will be on your side.