Date: 4/29/2022
Author: Chris Hood
Be sure to check out new episodes of my video podcast each week, where my ace pupil Brian Jones and I talk the ins and outs of options trading- and give you insights and strategy that you can immediately put to work for you in the markets.
You can become addicted to anything.
I’m sure I’m not the only one who has watched drugs and alcohol destroy the lives of friends and loved ones.
It’s heartbreaking.
Just the other night, I happened to spiral down a YouTube rabbit hole and myself binge-watching a show called My Strange Addiction.
Wow.
A woman addicted to eating soap? Hoarding rocks? In love with inflatable animals?
There are some odd people in the world…it truly is possible to be addicted to almost anything. And this started me thinking about why some continue making bad trades.
I tell any trader who cares to listen – there are occasions when they should just do nothing.
Times when the market is so topsy-turvy that no one can possibly know what will happen with any degree of probability.
When indicators with excellent win rates are throwing contradictory signals day after day. Instances when it’s better to just watch and wait.
Yet some people can’t do that.
Even many of the big money hedge fund managers are getting smashed.
Consider Bill Ackman’s 400 million dollar loss on NFLX earnings last weekend. And most recently, the price drop of Catherine Wood’s Ark Innovation by 65% since 2021.
If top investors can’t get it right, I have no idea what makes newer retail traders believe they can.
“When anything you try seems to be a gamble, it’s best to just sit it out and wait. Eventually, the market will give clear signals on what to do.”
It is possible to make money in the market right now, but it’s challenging and complicated
The skill required exceeds that of 99.9% of retail traders.
Just give it a momentary rest.
If you can’t go a single day without placing trades, even in a market like this, it might signal something more problematic than just a lousy trading plan.
Currently, my book is very light.
I’ve cut out most of my options positions and protected my stock using collars, covered calls, and married puts.
Consider doing the same.
My subscribers might notice that I don’t send out many trades when the market is troubled. The reason isn’t that I don’t want you to make money; it’s that I don’t want you to lose.
I’ll only send a trade alert on the highest probability set-ups.
Why?
Because I place the same trades myself. I would never advise someone to enter positions I don’t want.
Your wins are my wins, and your losses are my losses.
If you’re wondering why you haven’t seen an alert come through recently, keep this in mind. You aren’t being shortchanged here; I’m protecting you.
For those trading on their own, let me offer you the following tips.
First, if there are no clear signals or strong set-ups, just take some time off. The market isn’t going anywhere.
Don’t blow up your account by taking unnecessary risks.
In a couple of weeks, you’ll have a clearer picture of what and how you need to trade.
Forcing trades leads to consistent losses and will bleed your account dry.
Second, stop betting on earnings.
Trading earnings is literally putting your money on a coin flip. Obviously, you might win big, but you could also lose your shirt.
Remember Ackman and NFLX.
If you must take a bet, make it as small as possible and accept a 100% loss upfront.
And finally, if you are having trouble staying out of the market for a few days or even a few weeks, consider that you might have an addiction.
I say this, in all honesty.
You might need to talk to a therapist and make sure that trading is something you should be doing.
I’d rather see you put your money in a savings account than give it all away to the market. I say this not only as an options coach but as an empathic, concerned human being.
The last thing I want is to see you featured in some YouTube video alongside a guy who can’t stop drinking gasoline.
Stay safe and be patient.
Profits are just around the corner.
Cheers,
Chris Hood
PS – I’d like to give a shout out to my colleagues at Rogue Investing Daily. This week, their portfolio posted two nice wins – a 26.24% gain on UVXY and 48.71% on WEAT. Keep up the great work! Head over and see how they did this by clicking the link right here.
