Papale on “Turning it Around”

I was going over some homework with my kids and saw some interesting facts about our planet Earth and thought I would pass a few along.

Depending on where you are standing on the earth, you could be spinning at up to 1000 mph.  The equator has the fastest rotation, the poles almost none.  In addition to that spinning, the earth travels around the sun at 67,000 mph (good suspension –  can’t even feel it).  The earth at one time may have had two moons.  Scientists think a smaller one crashed into our present moon which explains why the two sides of our moon look different topographically.  Finally, the deepest point on earth is 35,813 below sea level at the Mariana Trench.  You are now nearly prepared to pass a 6th grade science quiz.  Good luck.

A trader approached me recently and said  he had been struggling a bit in his trading.  He wanted to transition from part time to full time but just did not have the consistency or profitability yet to make the move.  We sat for a while as he explained and I listened.  Afterwards he asked me what I suggested he might do to get him on track.  I don’t claim to know it all in trading but I did have a few suggestions.

Have a trading plan and stick to it. There is no rigid components of a trading plan but some things that should be included are dollar allocations per trade, profit and loss targets, adjustment methods and levels, strategies and scaling rules.  The plan should be constructed and well thought out before any trading is placed.  Once trading, follow the plan without fail.  At this point, the trade should be on autopilot.

Quit watching the screen.  This guy is not a day trader or market maker.  He trades longer term positions.  Set some alerts and forget about what’s going on.  When something needs to be done, do it.  Watching and obsessing about little blips in volatility or volume spikes at particular strikes tend only add stress and worse can lead to emotional decisions off the cuff.

Shut off CNBC – or at least mute it.  Someone once referred to this as “financial porn”.   Ignore 99% of what they say.  You’ll be wealthier for it.

Manage your trade, not the market.  The market does what it does.  We can’t control it.  Don’t obsess or question it.  It is what it is.  We can however manage our trades.  That we can control.  Do that and forget the rest.

After the close, let it go. US equity markets close at 3:00 pm with some options markets open as late as 3:15.  Once closed, finish things up and do what you need to do and get away.  Go home, hit some golf balls, workout or whatever you do to relax and take your mind off the market.  It will improve your  mental health and make you better suited for this business.  I am not saying not to study or spend time improving your skills.  Just try not to think about positions or markets that you cannot control after the close.

Steve Papale is a mentor with DiscoverOptions, the educational arm of OptionVue Systems.  Inquiries should call 847-816-6610 or email info@DiscoverOptions.com.

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