Confounding Tape: Markets Lift

I spent my day reading and listening to rag time music, trading poorly — but positioning bullishly into tomorrow. I had said to myself “avoid selling short in November you fuck” and even wrote a memo for myself. Lo and behold the market opened and I only wanted to short it. I paid for this with my money and ended the session losing 34bps.

My losses were small because I had many longs and made good money on them. After the Powell QnA today I thought for sure markets would fall into hell, roasting the longs in a giant cauldron of spite. The opposite occurred and the bulls sashayed all the way higher, dancing freely and gayly, adored with rainbow feathers and patent leather tap dancing shoes.

The NASDAQ jumped 210, yet the small caps didn’t even make it past +0.4%.

We had some fucking collapses too, with shares of $EL -18%, $PAYC -39%, $MTCH -15% and what seemed like a never ending array of house fires — yet the overall picture netted a positive result. Markets like this cause me to trade over-cautiously and as a result — I missed out.

As a younger man, I probably would’ve kept buying under the auspices of mysterious hands guiding markets inevitably higher. I might’ve called an older Fly a “piece of shit old fucker who didn’t know what the fuck he was doing.” Older Fly would then poison younger Fly’s energy soda and kill him — to stop him from making all of the mistakes he was bound to make in his evergreen quest to become “the best trader of all time.”

I have learned many things trading, when to press bets and when how to read the room for risk. But most of all I’ve learned my own limitations and no longer possess an ego that gets in the way of my performance. It’s ok to miss a rally or blow a trade. It’s not rational to behave like a 25 year old when you’re in your 40s with a family. The best trade is the one that positions you for profit, without too much potential downside and this is easily achieved through position sizing, diversification, and a natural talent for peering into the future to decipher the codes to unlocking eternal success and a roaring passion to win — even at the cost of happiness, which of course is entirely overrated.