The Fear of Loss in the Market

As I re-enter the market somewhat late in the game today (as I missed the bullish run of the last few days).  I am reminded that only experience and knowledge allows me to relax every time I enter a trade, even when I am stepping into buying at new all-time highs.

Today I am acutely aware that I have a number of new members entering trades for the first time.  This can be scary, I get it.  But the truth is, no-one can predict with absolute certainty where the market will turn.  I have come across some very good technical analysts in my time, some that even have a high degree of accuracy, but none get it right all of the time.  Not even the greatest of them all, WD Gann, was right all the time.

So where does that leave us?  It leaves us with the element of probability, and only probability counts in the market.  For I cannot tell which trades will be winners, but I know that over time my winners will significantly out-strip the losses by a large margin.  As my system does not try and join in on trends, it anticipates them and enters at the beginning of each new one.

Therefore, in terms of analogies, I am the house, not the guy at the blackjack table.  As the house, I know I will not always make money at the every table, but with enough passage of time and deals of the cards, it is as inevitable as death and taxes that I will win.

So I humbly propose that you feel the emotions that come with trading real live cash, you cannot escape them, but never let them allow you to act out-with a predetermined set of probabilities and rules, as that only leads to failure and internal ridicule.

Market News:

The S&P 500 and the Dow Jones Industrial Average set records in a fifth day of gains as investors cheered data showing the U.S. economy expanded in the third quarter by the most in 11 years.

The Nasdaq, however, fell, snapping a four-session winning streak, as biotechnology names weighed.

After rising as much as 109 points, the Dow Jones Industrial Average closed 64.73 points, or 0.4 percent, higher, at 18,024.17, with Chevron leading blue-gains that extended to 25 of 30 components.

Also rising to an intraday record posting its 51st record finish of the year, the S&P 500 advanced 3.63 points, or 0.2 percent, to 2,082.17, with energy pacing gains and health care the sole laggard among its 10 main sectors.

Erasing initial gains, the Nasdaq slid 16 points, or 0.3 percent, to 4,765.42.

Tuesday’s economic reports had the U.S. economy soaring by 5 percent in the third quarter, the most rapid pace since the same period of 2003, while a separate report had orders for durable goods unexpectedly dropping in November.

Other reports had consumer sentiment at 93.6 in December versus a 93.5 estimate and the sale of new single-family homes falling for a second month in November.

Wednesday

8:30 a.m.: initial claims

1130 am $29 billion 7-year note auction

1:00 p.m.: stock market close

News Sources:  CNN Money & CNBC