|
Connect with Peter on LinkedIn!
Hi folks,
I will get to Russell soon but first a story about toilet rolls. I received an email from a trading friend discussing his challenges with not acting upon what he sees happening in the market.
So, consider this, our minds are conditioned from family, school, society, our work, belief systems etc etc
Its very difficult to stop that conditioning, but we can become aware of it from lots of self introspection.
Trading attracts a lot of very smart people (and don't think you are not one of them because you have probably achieved a high position in your career) however, being smart is not useful if one is effected by a lot by emotions, OR, one does not listen to emotion AND intuition.
What happens when we see things we don’t understand or feel perplexed about is that our brain (conditioned mind) sometimes can't accept what we are seeing,
OR
it does not make sense so the mind ignores it.
At the last seminar I did at the ATAA in Sydney my last power point slide was a question,
"are you trading what you are thinking - or are you trading what you are observing?"
For example many traders buy stocks in down trends "thinking" the price will reverse and go up. But really, what they are seeing (and ignoring) is a down trend.
I like to tell the story of how my partner noticed panic buying of toilet paper just before the pandemic covid market crash. Then and there in the supermarket isle, using her phone, logged on to her Super Fund and transferred into cash.
So ok, she has exceptional mind training from a Clinical Psychology degree, also she is a woman and women tend to trust intuition and feelings more than men. Women have the ability to see and use logic but ignore it if their intuition says something does not "add up".
This is where men can fall down - because they want the logic and only the logic. But the logic was there as she said to me "if people are panicking over toilet rolls then they are going to panic even more about money" - and she was right.
Did she know for certain? No of course not - but too many people "wait" for certainty and then its too late - the horse has bolted.
As I said earlier the way to trust more what you are "seeing" is from more personal self introspection. Perhaps you could ask yourself the question "why don't I trust what I observe?"
Russell
One more opinion this week and it's about the Russel 2000 in the US, compared to the Aus Small Ords (XSO).
There has been much gnashing of teeth as to why the mid caps and small end of the Aussie market have not responded to the recent rally, so here is my reasoning. The Russell in the US has not joined in the rally and its been lagging the SPX, Nasdaq and the DOW. Except for last night when the Russell jumped out of the blocks. The correlation between the Russell and the XSO is obvious. Unfortunately I had a devil of a time loading the chart here so do yourself a favour and click the link below for the chart of the Russell and the XSO and see for yourself.
https://www.tradingview.com/chart/E8yngGVz/?symbol=AMEX%3AIWM
With the recent rally in the Russell the XSO is playing follow its leader. I suggest you keep a close eye on the Russell for it may well tell us if the spec end of the Aus market will finally rally. Or has it started with the 14 buy signals generated in the 52 week closing high system?
https://www.easysharetradingsystems.com.au/how-to-trade/52-week-highs
I mentioned in my previous emails I would be focusing more on mindset and psychology. If you are interested in that part of your trading and personal development, particularly trusting intuition and not being blind sided by over thinking, I encourage you to start by reading the Zen Trader. I would like to thank all those that have already purchased the book and the reviews the book received, its currently tracking at 4.3 stars out of 5 on Amazon and I have posted a link below to the review page.
https://www.amazon.com.au/Zen-Trader-ancient-wisdom-markets-ebook/dp/B09MKMGNW3#customerReviews
A review received just today by email
"I have to say I was expecting the typical share market raving book, however Pete’s book is excellent and I have actually enjoyed his book as much as Trading in The Zone"
Until next time
Peter
If Facebook is more you thing, friend him here!
|
