SPX STILL at Resistance and the BADABING TRADE

Good Morning,

I reached my goal with 2 BADABING TRADES. 1% of the portfolio and I am not waiting around for:

**options expiration trade

**rumorvill

**end of day/week lack of trading trade

What is the BADABING TRADE? I will give you this one as it is a bit of trading psychology and you know I always include that in my writing. In Chicago, I would turn around and look for ______ at about 8:30am and he was gone. I figured out that he was green and took off. He didn't care what was left on the Friday trade. He made money and he was out already enjoying his weekend. The days that I saw ____ at his terminal towards 9, 10, 11, were the days where he was beat up early and he was trying to get some of it back or maybe even get flat. Even on those days, if he got some or all of it back, he wouldn't push to then try to make it positive. He was already "positive" by grinding back towards breakeven and working very hard to get there. 

The lesson: trading can be very, very emotiionally taxing and the last thing you want is to have 48 hours to stew about the stupid mistakes you make. That is why I am writing you this article. 2 trades, two winners. One of them was a BUFFALO BOUNCE  in the GBP/USD:

Past performance is not indicative of future results

Again, getting long the dollar in very, very specific locations with proper risk to reward and trade management can be successful. BUT, it is going against the trend and you have to be realistic about your overall goals, both in timeframe of trade and pips gained. 

This is true for any trade these days. As long as we have news bombs on the horizon, be realistic about the length of your trade, the location and the potential reward. Be realistic!!!

The next chart I want to show you is the long term chart of the GBP/USD and this is why I have been so bullish equities and so willing to ONLY get long the dollar in very, very specific places, mostly as a hedge versus an actual trade:

Past performance is not indicative of future results

The double bottom pattern you see has me thinking that we have more room to run and that may be the result of Europe's vote next week. It gets the SPX up towards 1260-1280 and then, again, as protection, I will be willing to buy the USD as this double bottom/news event is satisfied.

So I will carefully start working on where to work in Oct-Nov protection and what percentage of the portfolio I deem necessary to hedge.

So overall, I do expect equities to bust through to the upside and more shorts that are paying attention to the "typical fundamentals" will have to puke. I just hope I do have some protection on, but even if not, I am not expecting a massive move to the downside and may actually look for a buying opportunity. 

See: there are always opportunities, you just have to be patient and focus on location and quality of the trade!

Thanks to the Park City Trading/Investing Club - another solid meeting with some new faces. The new room really made a difference. Data on next month's meeting date will come soon.

Happy Trading and Be Environmentally Cool

Coach Brian

Forex trading is one of the riskiest forms of investment available in the financial markets and suitable for sophisticated individuals and institutions. The possibility exists that you could sustain a substantial loss of funds and therefore you should not invest money that you cannot afford to lose.