Trading Lesson of the Week

• October 6, 2024
• LAC | T.PEY

In This Week’s Issue:

• Upcoming Events – 4 Free Classes in October
• Market Outlook – Inflation Comeback?
• This Week’s Market Minutes video – 3 Stocks to Buy, What Happened?
• Trader Training – The Winning Trader Mindset
• Strategy – Stockscores Market Scan

Upcoming Events – October

Would you like to learn how to manage your retirement savings better? Ever thought about being a part or full time stock trader? Our October Events will take a deeper dive into how the Stockscores approach to investing and trading can bring you profits in the stock market. Free to attend, live so you can ask Tyler questions and every registrant will receive a free electronic copy of Tyler’s book, The Mindless Investor.

Go here to learn more.

https://www.stockscores.com/trader-training/upcoming-events/

Market Outlook – Inflation Comeback?

The trading activity in the stock and bond markets has been motivated by expectations of lowering interest rates in the months ahead. Last week, a stronger than expected US jobs number put the emphasis back on inflation, which conflicts with the lower interest rate outlook. The market rallied on the sign of economic strength but I think investors may now focus on the potential for high rates longer, which is ultimately bad for the broader market, but seems to help the large cap tech stocks.

The US bond market has pulled back sharply over the past two weeks, lowering the probability of a quarter point cut to 83% and taking the half point cut off the table at the next Fed meeting in a month. Market attention will be focused on economic numbers in the weeks ahead.

Commodity stocks are doing well, perhaps motivated by inflation concerns. Strong Gold buying at Costco continues to drive prices higher and now Lithium, Uranium, Copper  and Silver are showing strength, helping the Canadian market outperform the US.

This Week’s Market Minutes Video – 3 Stocks to Buy, What Happened?

1 month ago, I highlighted 3 stocks as buy considerations, EVGO, AUR and COMP. In this follow up video, I show the performance since I made those picks and discuss where the sell points are. Then, I provide my analysis of the stock, commodity, currency and bond markets. Finally, a look at the trade of the week on DUO.

Click here to watch the video on YouTube

https://youtu.be/llpMSBW1FAk

Commentary – The Winning Trader Mindset

Want to know how to consistently do well in the stock market? Let me give you an outline for the mindset you must have.

First, understand that the stock market is not fair. Some people get better information than others. They have an advantage.

Second, use this lack of fairness to your advantage. When people with better information act in the market, they leave a trail for the rest of us to follow. If you want to find stocks that have a better potential to move up significantly, don’t listen to what the media says. Don’t listen to what people say. Look only at what people are doing with their money.

When a stock suddenly shows strong buyer interest with stronger than normal volume, take notice. These are the characteristics of Alpha stocks and trading Alpha stocks is how you beat the market. They lead the pack.

Learn how to read a stock chart. If you don’t know how yet, sign up for my webinars in October, links above. Watch the free videos on the Stockscores YouTube channel. It is not hard, but it does take practice. You have to know the basics of chart reading because not every stock that shows abnormal price and volume activity is worth buying. Only those that make abnormal moves from a predictive pattern are worth considering. I can teach you how to read chart patterns.

Realize that even the best analysis on the stocks that have the most standout chart pattern breaks does not guarantee success. Trading is a numbers game. Some trades will work, some will work really well and others will be losers. What matters is how you do over 10 trades, not just one. This requires an appreciation for Expected Value. Don’t know what that is? I will teach you that to you in October.

Since you will not be right on every trade, you must be good at losing. You must know when to take a loss and have the discipline to take that loss when the market proves you wrong. Good losers do well in the market because their losses don’t outweigh their winners.

You must always be learning and evolving. The market has always been about human fear and greed but the ways to take advantage of it change over time. After 30 years of trading, I am still always looking for ways to be better. We have to be one step ahead of the crowd.

Finally, if you want to be successful in the market, focus on yourself. Emotional control, discipline, focus, determination and optimism are the characteristics of most good investors and traders. Whether you succeed or fail is entirely in your control, you just have to take the time to understand how the market really works and how to take advantage of it.