The three Vs
So the jobs numbers were a bust. A third of what they were supposed to be. As a result the market slid. This Friday being a long weekend, the market slid even further into the close marking a weak week. There were still trades to be made though. Even when the market is down, as long as there are the three V’s - volume, volatility and velocity - there will be trading opportunities.
It is important to understand the difference between trading and investing. Traders are people who watch the market closely, daily. We go in and out of positions quickly, often in minutes. So any day can give us opportunities to trade. We may be in and out of the same position multiple times in a week or even a day. It’s a job.
Investing involves a much longer time frame. Usually years. It only takes about an hour a week to figure out a good stock to buy and then begin building up a portfolio. Before I began trading, I learned to invest. This meant I had to learn how to value stocks, when and how to buy stocks. I also started out with very little money and trading was not really an option. I simply did not have enough money. Once I had built up large enough enough positions in the ten stocks I owned, I begin trading options. But it was years before I had built up enough of a portfolio and really begin to trade. It was the time I spent learning how to invest that made me the trader I am today. Time is on your side. Do not rush learning about he market.
Market Today: The market was volatile today. It gave me the chance to open and close a number of option contracts. The bets I made on Docusign (DOCU) and Broadcom (AVGO) paid off. I was able to close quite a few contracts when the market rose up unexpectedly, and I rushed to do so as I wanted to as I knew the long weekend would probably result in a sell-off into the close. There was a plenty of volume so contracts were snapped up quickly. And I sold to open just two into the end of day slide, not sure what Tuesday after the long weekend will bring. Despite the market being down, the day was profitable.