“US Loses AAA Credit Rating”
“There’s Going to be a Bloodbath in Stocks”
These are the screaming headlines in the news over the weekend! I had a busy social calendar, so I really didn’t have time to worry about it. So in case you are wondering what I did facing the trading day,,, OK, I’ll tell you: I thought of what I’d rather do: skinny dipping or going bungy jumping. Which kind of danger can I deal with?
Have you tried skinny dipping ? You know, going for a swim, in none other than your birthday suit? As “liberating” that must be, shaking off inhibitions and “accepting yourself” I am sure many many many people thought of it, but NOT done it. If you ask me, I’d probably go for bungy jumping than do that! Why?
Bungy Jumping – (which is to make a jump from a very high point tied by your ankles)
– is managed by system of cords, and professionally trained staff
– is tried and tested (since its beginnings in 1988), with industry standards and guidelines
Whereas, with skinny dipping:
Sea Walls - Coron Island Philippines by AJ Mallari
– question is : why expose yourself? Warts, lumps and skin imperfections not a problem? OK, we can go to a very pristine location with not a lot of tourists, but what about skin cancer? The mosquitoes? For fun and for trading, it’s a good idea to always have protection.
– if you have to do it, it is surely for impact to the “social environment”. However, we get so many of those “entertainers” showing skin, so this trick has lost its charm if you ask me. And you just don’t know how your “outing” is going to be received, how big the impact. Whereas, an important rule of trading is to measure the risk (it is is low enough) before going in.
So thinking about the “danger” of those two , I thought, I really don’t need to move a muscle today. I mean, I have a tried and tested system, the system performs when I let it do its work, so all I have to do is follow that. Due to some jitters, I had a thought of trying different strategy, and also jumping into a stock that I haven’t actually traded with this strategy, and then,,,, I stopped myself thinking : there is more danger in trying to do something I haven’t fully tested or understand.
This day, as expected, the market dived at the open, but recovered after about half and hour, and then moved downwards again.
And what just happened after markets in Asia closed in the red? The G7 financial representatives of leading industrial nations said they are committed to taking “all necessary measures to support financial stability and growth in a spirit of close cooperation and confidence.”
The G7 nations are the United Kingdom, France, Germany, Italy, Japan, Canada and the United States. That could have the effect of countering the credit downgrade. Also, the Federal Reserve of the US was said to be strongly considering another round of “stimulus”.
This is a good time to be learning, doing practice trades — develop your “system” and document how you are trading it given the market conditions. And be thankful you’re out of the market as it’s going to be a wild ride for a while.
