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“The Method” is a style of acting that was popularized by Lee Strasberg (Hyman Roth in The Godfather Part II) and Stella Adler in the 1950’s. Method acting dictates that actors become completely immersed into the lives of the characters that they portray, to the point where they stay “in character” through the duration of the production. As can example, boxing experts noted that Robert De Niro could have actually contended for a world championship while rigorously training to portray Jake LaMotta in the movie, Raging Bull. Later on in the film when De Niro portrayed a washed up LaMotta, he stopped training and intentionally put on fifty pounds for the role.
In trading, it is also important to block out your personal feelings and get into character. Normally, when I talk about not letting personal feeling interfere with your trading, I am referring to negative emotions such as blind greed, frustration, panic, etc.. However, in this case I am referring to all of the positive, patriotic emotions many traders have felt over the past sixteen hours. The killing of Osama Bin Laden was understandably a significant moment for Americans and freedom-loving people around the world. However, using that event as an emotional crutch for you to trade any way you see fit will probably not have your portfolio experiencing a fairy-tale ending. In the exuberance that followed the announcement last evening, it was easy to expect the market to see a potent rally today, seeing as the futures were indicating as much. Of course, the opening move was quickly faded and a bit of reality set in. We may still see a powerful move in the coming weeks, but for today the exuberance has been chilled and the much-needed consolidation is in progress.
As much as it would have fit the storyline if the S&P 500 had been up 3-4% today, Mr. Market only bleeds green, even if the rest of us bleed red, white and blue.
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Thanks, I needed that.
Thanks, Mike.
Hey, I bleed green!
of course you do
Perfect and insightful as always.
😉