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Blog - How to play the game

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Read All About It

Read All About It - Trading News Events

Roll Up, Roll Up… Read all about it, that’s certainly what the CNBC’s and Bloombergs of the world would like to see, and before I begin, please allow me to say that I do also understand that Traders can trade news events and achieve success. I’m NOT bashing those of you that trade this way.

Most news driven traders (that I’ve encountered) struggle … and if I was to be incredibly candid with you, I used to trade this way … Day Trading specifically… and unfortunately, I lost a lot of money… $10k approximately (which at the time - was a LOT of money for me)… so I would firmly place myself in the category of Traders who struggled badly trading the short term news driven game.

I had a question posed to me recently by 1 of my clients (and now friend) whom I’ve also educated in my methods, and he mentioned that he has successfully adapted to the current market conditions, and is now utilizing News Events to profit from shorter term moves and protective positions in the market (which I obviously love that he’s profiting) and he asked why I hadn’t adapted to the current Market and had chosen to move to the sidelines (I’ve been observing for a week now)

And it made me think long and hard about it… because it’s a very fair and logical question… and 1 that I constantly battle with the - oh c’mon Sam, you’re a MUCH better trader than you used to be, you know price inside out, you know it better than anyone - go on… just take a wee gamble…

I literally have to wrestle with that voice EVERY single day when I’m on the sidelines. EVERY SINGLE BLOODY DAY… and If you’re out there reading this - you probably know what I’m talking about.

So here’s my response that I wanted to share with you all, because I think there’s a lot of value to be had, and learning to take.

Whenever you attempt to trade in a manner that offers no real structure, it’s amazing how quickly it becomes massively unappealing, because when you trade with structure, you’re truly trading with the foundations, and for me, when I think back to the inconsistency, the drama, the mental hurdles, I quickly realize there’s nothing more frustrating than trying to interpret every little news event and trying to decipher the Media “code” in order to make a little profit.

It’s time consuming, and it’s a giant pain in the ass, and I really don’t like to trade this way. When you trade with structure, a rule set and apply discipline, it’s the most freeing thing in the world, and you soon realize that doing it any other way, just isn’t appealing.

Sure, we understand that when the market rises, it’s easy to look good, but it’s also easy to lose sight of the fact the market doesn’t go up forever, and when we get these major news headlines (which I know the talking point at the moment is Trade War News) - if we don’t get defensive at the right time and protect profits / capital, then there’s always the danger we can have our faces ripped off by Wall Street… and I dunno about you, but I don’t like the sound of having my face ripped off.

I’ve included a message I received from 1 of my clients today, who in the last couple of months, has learned Market Structure, Technical Analysis and every approach that I have, and he’s now applying discipline to his weaponry.

How many of you see Capital Protection as a victory? How many of you would like to be able to say you got defensive exactly when you needed to?

Thanks.jpg

What I’ve found to be true (for me), is that trading news events and “over extended” markets provides inconsistency, but I need to also point out, that I 100% respect ALL Trading styles - I know there’s more than 1 holy grail in Trading… but I have a style that works for me, and my style tends to work for most (if you have a career / business / family / work long hours / hectic social life) - Trend Trading (with elements of Swing Trading) - tends to work for most, and whether you trade Stock / Options / FX / ETF’s / Commodities - the rules and the systems really do apply to all, but the same rules and systems just doesn’t apply to News Events unfortunately.

Nobody loves a Rising Market more than I do… it’s easier to trade… but over the last few days, I’ve been asked a lot why I think the Market may be taking a dive and if we’re going to see “the next BIG Crash”?

My answer is simple.

Nobody can accurately predict the date of the next Big Crash, and anyone that says they can (the glory hunters on CNBC / Bloomberg feeding you the “News Events”)… are not to be trusted. They’ll seduce you with tales of August 2019 or November 2020… but the reality is, they’re date hunting, and if you throw enough dates, someone is going to be right at some point.

Rather than try to predict crashes (which is the quickest way to go broke) - why not have an understanding of WHEN to get defensive?(

It will likely save you the utter heartache that a crash will bring (which WILL happen at some point), and if you know when to get defensive, you’re well positioned to act on a rebound, or as what happened last year, profit to the down side.

I DON’T predict huge market down turns (like some of you might think)… I merely have an understanding of when to get defensive… and News Events never play a role in that.

Price tells me when to get defensive and when I weigh up the thank you messages from my client base this week, it’s satisfying to be able to watch it all play out, with nothing invested… it’s just not appealing to be in the market when Volatility is rising and major market support levels are being tested.. it’s too stressful, and quite honestly, I’d rather watch Game of Thrones (like I’m about to do), and then go have a Personal Training session (which I have this evening).

I don’t like stress in my life… so why add it by Trading News Events, and why add stress by trading in unfavorable market conditions.

Just my 2 cents.

Oh and if you’d like to align with our Trading Community and learn EVERYTHING we do at Honeystocks.com - just click the link below.

Feb 2018 - we got defensive

April 2018 - we got defensive

October 2018 - we got defensive

May 2019 - we got defensive

At some point it becomes more than just a fluke. Just sayin.

Sam McCallumComment