Date: 2/6/2023
Author: Chris Hood
The market is a machine designed to take your money.
That’s the plain truth.
Institutional traders often lose money and hedge funds do go bankrupt. Even with all of their sophisticated methods, they cannot get everything right.
And those folks have much more information and resources than us retail traders.
So the average market participant has absolutely no edge in the market except through careful attention to indicators and proper risk management.
Someone posted in the Trade Command chat that, “the market is a greedy beast.”
I couldn’t agree more.
But we do have two advantages over the big money institutions.
We have to milk these for all they’re worth.
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As individuals, we aren’t forced to trade.
Many fund managers and institutional traders have a requirement to remain invested or make trades. Even when the market isn’t the best.
There are no such regulations that rule us. We can choose to trade whatever we’d like whenever we see an opportunity.
And more importantly, we have the choice to avoid trading at all.
Use this in your trading plan. If you find yourself in a market environment that seems too risky, or one suited for trades for which you aren’t proficient, then just opt out.
Sit on your hands and do nothing.
Engage the market on your terms, don’t throw on trades just because you believe you must.
A second advantage is position sizing.
Many retail traders buy or sell only 10 contracts or less on a position. Even though I could size up, I prefer to keep my trades smaller.
Small trades mean you can easily move into and out of trades on any underlying stock with decent liquidity.
This isn’t as easy for big money.
If you’ve ever had a problem getting your 10-lot order filled at a decent price, consider if you were buying or selling 5,000 contracts.
It’s the same with stock shares.
Selling 200 shares is easy, but offloading 500,000 might take several weeks.
Retail traders don’t create market waves, but we can ride those created by institutional traders. We just have to have a proven system based on statistical probability.
Though we can’t eat at the big table, we can catch the crumbs that fall.
And those are big enough to make you wealthy.
Get all you can.
Cheers,
Chris Hood
PS – Don’t miss out on what could be the opportunity of a lifetime. Many analysts believe this is just the start of a new bull market in oil. In fact, Goldman Sachs says: “Oil will roar higher. ” Stating this new bull market in oil could easily last a decade. Will you be part of this, or one of those who gets left behind?
