Date: 8/5/2021
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.
“The biggest problem for traders isn’t making money. It’s keeping it.”
Let’s assume you’re the average retail trader.
You start out excited and ready to rake in some profits. In your mind, trading is a quick and straightforward way to get rich.
Coming into the market around October, you win big over the next few months during the seasonal rally from November to January. Then overconfidence kicks in.
You assume you’re a natural at trading. But, unfortunately, the market rally lets you get away with poor set-ups and trade management.
Essentially, it’s rewarding your bad behavior.
Overconfidence turns into cockiness, and your position sizes increase out of proportion to your account.
You fall for the age-old recency bias, assuming that what has happened in the market will continue to happen.
Markets only go up, right?
Then down comes the hammer. Every year, institutional rebalancing, profit-taking, and sector rotation wreak havoc in February and March.
Your positions get smashed.
You give back everything you’ve earned and then some.
Frustrated, you just give up and decide maybe this isn’t for you. The market hates you – you’d better just get out.
Never mind that you haven’t built a trading plan or actually put some thought into why your positions failed. It’s far easier to blame the market than admit you screwed up.
You call it quits just before the early summer rally in June and July.
However, you keep up with all your “friends’” winnings in the trading chat group. People who seem like they have an IQ of 50 are making money, so surely you can do it too.
In August, you open your computer and start trading again.
Not realizing you’ve missed out on the easy opportunities, you start to put on positions in one of the more volatile seasons of the year.
The market turns into a washing machine of ups and downs, and you’re shaking with anxiety. Every loser eats up your profits from three wins.
Should you actually stick with it for the entire year and not blow up your account, you be basically back at square one.
Net profit for the year $85 bucks.
All that work, stress, and effort for basically nothing. Your broker gets his fees, and you’re left with nothing to show.
This is just too much for you, and you give up for good.
I’m not a gambler, but I’d put my money that some of you have experienced this already. It’s a rollercoaster that no one wants to ride.
But I’m here to tell you that it doesn’t have to happen to you, and if you’ve already been there, you can prevent it from happening again.
For my subscribers, none of these crazy events are surprising.
We know about the historical performance of different periods of the year and plan our trades accordingly. Thus, market action not only tends to repeat itself, but it gives ample technical warnings when unusual movements are about to happen.
You’ll learn to go in hard and heavy when the market is in your favor and scale it back when times are lean.
Also, you’ll learn that no matter what the market is doing, it always presents opportunities. It’s just that in fragile or volatile markets, you’ll need to be incredibly selective with your set-ups and trade small.
None of this is meant to discourage you.
On the contrary, most successful traders have blown up their accounts, or nearly so, on more than one occasion.
I spent years on the rollercoaster before I finally built a system that was consistently profitable year-round.
My goal is to teach you how to avoid all the mistakes I’ve made over the years.
If trading were easy, then everyone would be rolling in profits. If it were impossible, no one would.
Like every jiu-jitsu beginner, you have to get on the mats, keep coming to class, and listen to your instructor. It’s just that simple.
I wish you the best and would love to see you join our winning team of Alpha Hunters.
