Navigate The S&P 500 In a Bear Market Safely – Trader Tip Video

In today’s trader tip video, Chris explains how to navigate the S&P 500 in a bear market. He takes you through the US Dollar ETF UUP and the natural gas ETF UNG both of which have been holding up well and look ready for a potential breakout run.

Volatility draws people in who are looking for big plays. However, the markets being so good at pulling money out of your pocket generally means that volatility can hurt you more than it can help.

The S&P 500 has been in a strong uptrend but flipped to red (risk-off) about two months ago. By following our strategy, we have been able to sit back and watch the markets decline without taking us along for the ride. Now, we sit in cash and protect our capital. Though this is not a position that a lot of traders like, once you embrace a cash position your stress levels go down and you end up saving money that can then be put to use once the markets stabilize.

Bear markets are traded a lot differently than bull markets. This is not a time to get fancy and try to put on a lot of trades, especially if you have not traded through a bear market before. It’s a time to protect your capital, educate yourself, and position yourself for good opportunities down the road.

TO LEARN MORE ABOUT HOW TO NAVIGATE THE S&P500 IN A BEAR MARKET WATCH THE VIDEO

Subscribers: Please let us know what you would like to learn and we will add it to the roster of our weekly Technical Trader Tips!

Non-subscribers: Please enjoy these micro-lessons as a way to further your education and understanding of how a technical trader…well…trades!

TO EXPLORE THE Total ETF Portfolio, PLEASE VISIT US AT The technical traders. You’vE GOT MORE TO GAIN THAN TO LOSE WHEN SEEKING INFORMATION!

Disclaimer: None of this material is meant to be construed as investment advice. It is for education and entertainment purposes only. The video is accurate as of the posting date but may not be accurate in the future.

Sell And Go To Cash Position Or Hang On By Your Fingernails?

As professional traders, we spend a lot of resources determining whether we are in a bull-up market or a bear-down market. The follow-up to this is our additional efforts in finding the right places to buy or sell in either of these scenarios.

As traders, we also have different styles or time frames that we trade. For instance, longer-term trend traders may utilize the daily, weekly, or even monthly charts. In comparison, shorter-term swing traders may utilize the 4-hour or 1-hour charts.

Much emphasis and resources are committed to these efforts. However, we have learned that going to cash or having a cash position is just as important, if not more important, than having an actual position in the market.

The beautiful thing about trading is that the trader is in control. We do our research, and then after weighing the evidence, we have the edge in that we have complete flexibility in determining whether we buy, sell, or do nothing.

Cash position vs Invested in the Markets

Taking a position and making +20, +30, or +40% is great. But going to cash and avoiding a -20, -30, or -40% drawdown is just as important. We could even say that having the ability to go to cash is even more important as it protects our attitude and our health. There is nothing enjoyable about worrying about a position 24-hours a day, 7-days a week.

A trader should ask themselves: Is holding onto this position worth the stress and worry about whether the market is going to rally; or will the market give me back a small portion of my hard money losses; or will the bottom completely fall out of the market which will destroy my account?

Age is a defining factor in answering this question. Depending on our age, do we have the time or the energy to make back losses if the unthinkable happens? Successful traders have learned the hard way that retreating (going to cash) may be the best option as you live to fight another day.

CARVANA -91%

Carvana CVNA NYSE is the perfect example of the bottom falling out unexpectedly. The rallies were short-lived, ranging from 4-to 14 days. After CVNA had dropped about -25%, it only rallied back about 14-days before it started a steep but steady decline. CVNA is a textbook example of the importance of accepting a loss and going to cash.

As technical traders, we exclusively follow price. This too is an important concept to grasp. Following and trading price simply means that the market tells the trader what to do and not the other way around. Being one with price will deposit money into your trading account. Fighting price will withdraw money out of your trading account. The market (or price) does not care what a trader’s opinion or bias is.

Managing and protecting our hard-earned capital is our individual responsibility and should be the top priority.

CARVANA CO. • CVNA • NYSE • DAILY

CVNA - when to sell to a cash postion

US DOLLAR – A STRONG BUY

If a trader doesn’t trade currencies, why should they even care about what is happening to the USD?

Think about the world economy. Whether a stock, ETF, bond, or commodity, everything is affected by the currency it is traded in. Currency is part of the fundamental make-up of each market. Tracking and understanding global money flows provides us with the big picture.
Armed with that information, a trader can make better decisions about the markets they trade or how they manage their cash position. In other terms: risk-on, risk-off, trade-on, trade-off, capital invested, capital not-invested, etc.

The US Dollar continues to attract capital from investors all over the world. But could this be a double-edged sword for US stocks? As capital flocks to the USD, this, in turn, hurts US multinationals as they need to convert their weak foreign currency profits back into USD.

The USD safe-haven trade may eventually trigger a broad and deep selloff in US stocks. As the USD continues to strengthen, corporate profits for US multinationals will shrink or disappear.

US Multinational $1 Billion Revenue Example:
  • $1 billion in revenue-generating a 15% net profit with a net neutral 0% currency translation equals a $150 million profit.
  • $1 billion in revenue-generating a 15% net profit with a negative -15% unfavorable currency translation expense equals a $0 profit!

In addition, the impact of inflation on the global consumer will lead to a pullback in consumer spending which will further reduce corporate revenues and profits. Combining the global currency dislocation and the economic cool off will bring on a global recession.

WISDOM TREE BLOOMBERG • U.S. DOLLAR BULLISH FUND ETF • USDU • ARCA • DAILY

US dollar bullish fund chart

RUSSELL 2000 SMALL CAPS -29.96%

The Russell 2000 stock index is considered the bellwether of the US economy. The index measures the performance of 2,000 smaller companies whose focus is on the US market. Tracking this index gives us a broad overview of the health of the overall stock market.

Since bottoming in March of 2020, the IWM has more than doubled. But in November 2021, the IWM put in its final top. Upon completing and then breaking out of a distribution wedge, the IWM is now solidly in a bear market.

Knowing this information tells us that we should seriously consider we are in a period of risk-off, no-trade, and cash as a position.

For experienced traders, they may consider buying non-leveraged inverse index ETFs on days when the market has a sharp spike rally up.

ISHARES • RUSSELL 2000 ETF • IWM • ARCA • DAILY

Russell 2000 ETF chart

LEARN FROM OUR TEAM OF SEASONED TRADERS

In today’s market environment, it’s imperative to assess your trading plan, portfolio holdings, and cash reserves. Experienced traders know what their downside risk is and adapt as necessary. Successful traders manage risk by utilizing stop-loss orders, rebalancing existing positions, reducing portfolio holdings, liquidating investments, and moving into cash.

Successfully managing our drawdowns ensures our trading success. The larger the loss, the more difficult it will be to make up. Consider the following:

  • A loss of 10% requires an 11% gain to recover
  • A 50% loss requires a 100% gain to recover
  • A 60% loss requires an even more daunting 150% gain to simply return to break even.

Recovery time also varies significantly depending upon the magnitude of the drawdown. A 10% drawdown can typically be recovered in weeks or a few months, while a 50% drawdown may take several years to recover. 

Depending on a trader’s age, they may not have the time to wait on the recovery or the patience. Therefore, successful traders know it’s critical to keep their drawdowns within reason, as most of them learned this principle the hard way!

HOW WE CAN HELP YOU LEARN TO INVEST CONSERVATIVELY

At TheTechnicalTraders.com, my team and I can do these things:

  • Reduce your FOMO and manage your emotions.
  • Have proven trading strategies for bull and bear markets.
  • Provide quality trades for investing conservatively.
  • Tell you when to take profits and exit trades.
  • Save you time with our research.
  • Provide above-average returns/growth over the long run.
  • Have consistent growth with low volatility/risks.
  • Make trading and investing safer, more profitable, and educational.

Sign up for my free trading newsletter so you don’t miss the next opportunity!

We invite you to join our group of active traders who invest conservatively together. They learn and profit from our three ETF Technical Trading Strategies. We can help you protect and grow your wealth in any type of market condition by clicking on the following link: www.TheTechnicalTraders.com

Chris Vermeulen
Chief Market Strategist
Founder of TheTechnicalTraders.com

Market Turmoil And How To Trade Futures In Backwardation – Videos

Get ready for a one-two punch! Brian Benson, the Options Trader at TheTechnicalTraders.com, shares his thoughts on the current market turmoil and trading futures in backwardation.

Market Turmoil

Brian sits down with Kerry Lutz, of The Financial Survival Network, to talk about how far he thinks the markets may drop. Is a relief rally on the horizon, or is this the lead-up to a bear market? Can options premium generate an income even during these volatile times?

How To Trade Futures in Backwardation

Next up, Brian offers an Options Trader Tip on Business First AM about how to trade futures in backwardation. Will the setup offer up a tailwind for a product like USO as the contracts are rolled forward?

TO EXPLORE THE STRATEGIES Brian uses, PLEASE VISIT US AT OptionsTradingsignals.com. YOU HAVE MORE TO GAIN THAN TO LOSE WHEN SEEKING INFORMATION!

Disclaimer: None of this material is meant to be construed as investment advice. It is for education and entertainment purposes only. The video is accurate as of the posting date but may not be accurate in the future.

Taking Advantage Of A Bear Market – PM Projections – Video

Chris sits down with Craig Hemke of Sprott Money to talk about their PM forecast and break down all the charts you need to navigate the coming bear market. Bear markets don’t happen very often and because of this (and due to lazy habits during bull markets) are very dangerous if you are over 40 for what it can do to your retirement accounts. As we never know how long it will last, the best place to be during times like this is in cash. It’s all about preserving your capital.

If a bear market is imminent and everything is falling, do you actually want to own anything? If bonds aren’t safe; if the stock market isn’t safe; if equities aren’t safe; why hold any of them? There are times when sitting in cash, especially the ‘safe-haven’ US dollar, is the best option. It’s a passive play for sure, but if you want to live to trade another day, it can be the choice to go with.

Based on a daily chart, silver, gold, and miners were on a tear earlier in the year. Though they can be very good defensive plays, they can reverse and sell down for weeks on end. Recent volatility, in general, has so many people dancing in the markets, trading back and forth, that it’s day trader’s heaven and swing trader’s nightmare. This is why position management is so important.

Overall, we are coming into a unique time. Though not confirmed yet, I believe that a bear market is only days or weeks away. Preparing for this is about managing your plays and cutting your losses. The first goal – avoid a bear market (aka protect your capital). The second goal – grow your wealth (aka retire sooner).

Click on the link below to watch the LATEST PM FORECAST & HOW TO TAKE ADVANTAGE of a bear market

Precious Metals Forecast

Get Chris Vermeulen’s Gold And Silver ETF Trade Signals at:
www.TheTechnicalTraders.com

Disclaimer: None of this material is meant to be construed as investment advice. It is for education and entertainment purposes only. The video is accurate as of the posting date but may not be accurate in the future.

Investing Conservatively = Calm, Cool, Collected, Pays Big Dividends

Investing conservatively is how the aging investor population needs to approach the stock market. As it turns out, investing in dividends stocks carries much more risk than you may think.

Dividend stocks (SPYF) fell 47% during covid, while growth stocks (SPYG) fell only 32%.

Why is investing conservatively in dividend stocks so risky? It’s fairly straightforward. Most of the money invested in the stock market is from long-term passive investors. These investors naturally want to own the large-cap stocks, which in most cases happen to be dividend-paying. So, if most of the money is positioned in these companies, guess which shares get sold the most during a market crisis or bear market, large-cap dividends-paying stocks.

When these passive investors start to call their advisors to liquidate their stock holdings, they tend to move their money into bonds which is partly why bonds rallying bonds rally.

CONSERVATIVE INVESTING IS NOT WHAT YOU THINK

The chart below shows why dividends are a losing bet despite what everyone else thinks.

investing conservatively provides consistent growth

New conservative investor comment

Lately, we have been sharing some of the thoughts and questions that our subscribers post on our market update boards. Today is no exception, with Chris M commenting,

“I’m young enough that I haven’t really paid the due attention to learn in a bear market before. This is absolutely fascinating. I took the advice here some time ago and started taking control of my retirement accounts (transferring into self-directed) and putting them into cash. This has saved me a lot of value already/so-far.”

Chris M

Chris M’s comment ties directly into what I have touched on in the past stating:

“Once you embrace cash as a position, your trading and investing become incredibly controllable and enjoyable.”

Chris Vermeulen

Why We Believe Strongly in investing conservatively

Here at The Technical Traders, we are a unique group of traders/investors who tactically navigate the market with our conservative investing strategy. We don’t believe in trading any more than we need to, and we do not believe in holding stocks, bonds, or commodities when they are falling – period.

Remember this – though you may love a certain stock, ETF, index, etc., it does not love you back. It does not care that you have put all your money into its performance. Put another way – a stock, ETF, index, commodity, etc., will not behave as you want it to, just because you love it.

As a new investor experiencing our conservative investing for retirement approach, Patrick B, iconically stated, “hope is not a strategy.”

We are calm, cool, collected, and cash-rich during market volatility, correction, and bear markets. Why is this? Because we follow the rules of our strategies and all indicators and alerts had us safely out of the markets weeks ago. Just as Chris M said, “this is absolutely fascinating.”

The reality is – and it’s this way with EVERYTHING in life – once you have mastered something or have a strategy to follow, the process can feel relatively slow, dull, and boring. What this means is that you are in control of your money and emotions. And that, my friends, is priceless!

investing conservatively means Patience.
Patience Is A Learned Behavior And
Sometimes It Takes A While To Sink In

Most people, especially the younger generation, simply don’t have the patience and don’t want to hear about investing conservatively or anything that may be slow or boring. They would rather keep buying the fad stocks, hold them and lose money until they are forced to give up.

A perfect example is how two million Robinhood traders have had their accounts wiped out already. That was over two weeks ago when stock prices were much higher, so millions more have likely blown up their accounts since then.

Unfortunately, we can only help those with the correct mindset and who value conservative investing where we trade less and risk less by holding cash at critical stages of the investment cycle. This allows us to make more money in the long run. It’s likely the reason why you are here trading/investing with us at TTT or are starting to recognize the value we offer. Granted, it is hard to see the full value until after a bear market has occurred because that is when you know where you stand among other investors.

Where To Set Your Focus

Bottom line, growth stocks topped out Feb 2021. Crypto, NTFs, and even collective cards all peaked out shortly after. With bonds currently in a bear market, we need to focus on preservation and will only trade when high probability trade signals form. There is still much more room for improvement for us to manage our money as I never stop learning and adjusting my analysis and strategies as the market evolves. Our ultimate stock and bond replacement strategy is something we will share more of in the future.

HOW WE CAN HELP YOU learn to invest conservatively

At TheTechnicalTraders.com, my team and I can do these things:

  • We reduce your FOMO and manage your emotions.
  • We have proven trading strategies for bull and bear markets.
  • We provide quality trades for investing conservatively.
  • We tell you when to take profits and exit trades.
  • We save you time with our research.
  • We provide above-average returns/growth over the long run.
  • We have consistent growth with low volatility/risks.
  • We make trading and investing safer, more profitable, and educational.

Sign up for my free trading newsletter so you don’t miss the next opportunity!

We invite you to join our group of active traders who invest conservatively together. They learn and profit from our three ETF Technical Trading Strategies. We can help you protect and grow your wealth in any type of market condition by clicking on the following link: www.TheTechnicalTraders.com

Chris Vermeulen
Chief Market Strategist
Founder of TheTechnicalTraders.com

50+ Years Old Investors? This Investment/Retirement Tip For You – Video

In today’s trader tip video, Chris recaps the markets from a long-term investor standpoint and talks about investment and retirement tips for investors who are 50+ years old. This is a life-changing opportunity – make sure you don’t miss out. You don’t want to get caught on the wrong side of what the market is going to do.

Based on the daily chart of the S&P 500 being down by 2.4%, we can see another big downward day for stocks. Overall, we are starting to see huge panic selling with our panic selling indicator. Last week it spiked to over 30 while today almost seems calm at around 14. Being that 3 is considered normal, we are in no way out of the woods.

Chris covers his Economic Performance & Stock Market Chart, along with what sectors are in a rally mode and what exactly that means. Next up, he looks at the Psychology of Stock Market Risk and what phase we are actually in at the moment.

See how the Technical Investor can help you to navigate a world where bonds are not the save-haven they once were. Learn how to outperform or match the stock market without the volatility and by avoiding drawdowns, thus making a huge difference in your mindset and stress level. Rather than going after one more percentage on your return, protect your capital, enjoy your life, and live to trade another day.

TO LEARN MORE ABOUT INVESTMENT/RETIREMENT TIPS FOR 50+ Years Old Investors – WATCH THE VIDEO

Subscribers: Please let us know what you would like to learn and we will add it to the roster of our weekly Technical Trader Tips!

Non-subscribers: Please enjoy these micro-lessons as a way to further your education and understanding of how a technical trader…well…trades!

TO EXPLORE THE STRATEGIES IN THE TOTAL ETF PORTFOLIO, PLEASE VISIT US AT THE TECHNICAL TRADERS. YOU HAVE MORE TO GAIN THAN TO LOSE WHEN SEEKING INFORMATION!

Disclaimer: None of this material is meant to be construed as investment advice. It is for education and entertainment purposes only. The video is accurate as of the posting date but may not be accurate in the future.

A Strengthening US Dollar Is A Double-Edged Sword

The US Dollar continues to attract capital from investors all over the world. But could this be a double-edged sword for US stocks? As capital flocks to the USD, this in turn hurts US multinationals as they need to convert their weak foreign currency profits back into USD.

The USD safe-haven trade may eventually trigger a broad and deep selloff in US stocks. As the USD continues to strengthen, corporate profits for US multinationals will shrink or disappear.

US Multinational $1 Billion Revenue Example:

  • $1 billion in revenue-generating a 15% net profit with a net neutral 0% currency translation equals a $150 million profit.
  • $1 billion in revenue-generating a 15% net profit with a negative -15% unfavorable currency translation expense equals a $0 profit!

In addition, the impact of inflation on the global consumer will lead to a pullback in consumer spending which will further reduce corporate revenues and profits. The combination of the global currency dislocation along with the economic cool off will bring on a global recession.

The following chart by Finviz shows the percentage the USD has appreciated against all the major global currencies year to date:

Let’s review a few of these primary currencies to get a better idea of how much capital is migrating out of each of these countries and into the US dollar.      

CANADIAN DOLLAR LOSING -7.29%

The Canadian Dollar CAD peaked in the first week of June 1, 2021. The Canadian economy has benefited greatly from soaring energy and commodity prices, strengthening metals markets, and strong real estate prices. But despite this economic strength capital is still migrating out of the CAD and into the USD.

INVESCO CURRENCY SHARES • CANADIAN DOLLAR TRUST ETF • ARCA • WEEKLY

CDN Dollar vs US Dollar Chart

SWITZERLAND FRANC LOSING -12.53%

The Switzerland Franc CHF peaked in the first week of January 6, 2021. The CHF has long been considered a safe haven for global capital during times of risk-off global market stress. The primary factor hurting the CHF is its current fiscal policy and negative interest rate of -0.75%. Therefore, the USD is still the preferred safe-haven currency due to CHF’s negative rate. Capital continues to flow out of the CHF into the USD.

INVESCO CURRENCY SHARES • SWISS FRANC TRUST ETF • ARCA • WEEKLY

Swiss Franc vs US Dollar Chart

BRITISH POUND LOSING -13.87%

The British Pound GBP peaked in the first week of May 24, 2021. The GBP was the primary global reserve currency in the 19th century and the first half of the 20th century. However, that status ended when the UK almost bankrupted itself fighting World Wars I & 2. Since that time the US dollar has replaced the GBP as the primary reserve currency. The USD has a similar interest rate to the GBP and is also benefiting from its strong presence in energy and commodity markets. Therefore, the GBP is experiencing capital flows out of its currency and into the USD.

INVESCO CURRENCY SHARES • BRITISH POUND TRUST ETF • ARCA • WEEKLY

British Pound vs US Dollar Chart

JAPANESE YEN LOSING -23.76%

The Japanese Yen JPY peaked in the first week of March 2, 2020. The JPY has also long been considered a safe haven for global capital during times of risk-off global market stress. However, the primary factor hurting the JPY is its current fiscal policy and negative interest rate of -0.10%. Therefore, the USD is still the preferred safe-haven currency due to the JPY’s negative rate. Capital continues to flow out of the JPY into the USD.

INVESCO CURRENCY SHARES • JAPANESE YEN TRUST ETF • ARCA • WEEKLY

Japanese Yen vs US Dollar Chart

how we CAN HELP YOU navigate current market trends

At TheTechnicalTraders.com, my team and I can do these things to assist you:

  • We reduce your FOMO and manage your emotions.
  • We have proven trading strategies for bull and bear markets.
  • We provide quality trades you can trust.
  • We tell you when to take profits and exit trades.
  • We save you time with our research.
  • We provide above-average returns/growth over the long run.
  • We have consistent growth with low volatility/risks.
  • We make trading and investing safer, more profitable, and educational.

Sign up for my free trading newsletter so you don’t miss the next opportunity!

Learn how we use specific tools to help us understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, we expect very large price swings in the US stock market and other asset classes across the globe. We believe the markets have begun to transition away from the continued central bank support rally phase and have started a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern begin to drive traders/investors into Metals and other safe-havens.

Historically, bonds have served as one of these safe-havens, but that is not proving to be the case this time around. So if bonds are off the table, what bond alternatives are there and how can they be deployed in a bond replacement strategy?

We invite you to join our group of active traders and investors to learn and profit from our three ETF Technical Trading Strategies. We can help you protect and grow your wealth in any type of market condition by clicking on the following link: www.TheTechnicalTraders.com

Chris Vermeulen
Chief Market Strategist
Founder of TheTechnicalTraders.com

Panic Selling And The Potential Cost Of FOMO – Video

Chris Vermeulen sits down with Jim Goddard on HoweStreet to discuss the recent massive panic selling in the stock markets. Other than cash, natural gas and the US Dollar are the only two safe havens at the moment. Foreign investment, for example, will move to the currency they believe in the most and right now that is the US Dollar.

When fear spikes, people being to liquidate every asset they own no matter the price. A ratio of over three on the panic selling indicator indicates fear is taking over. Yesterday we peaked at 31 – an extreme level. While this may be a day trader’s heaven, everyone doing longer-term trading should pretty much sit back and watch things unfold.

Should you hold onto stocks in a downtrend or during the lead-up to a bear market? The short answer is no. Why watch your money disappear just because you want to be in the stock market. Ask yourself this: would you rather miss out on a 4-5% return or save yourself from a 40-60% market correction?

The reality is that if we are entering a bear market it could take between 4-18 years to get back to previous highs. Not many people can wait that long for their accounts to recover. Can you?

TO LEARN MORE ABOUT panic selling – listen to the podcast

TO EXPLORE THE STRATEGIES IN THE TOTAL ETF PORTFOLIO, PLEASE VISIT US AT THE TECHNICAL TRADERS. YOU HAVE MORE TO GAIN THAN TO LOSE WHEN SEEKING INFORMATION!

Disclaimer: None of this material is meant to be construed as investment advice. It is for education and entertainment purposes only. The video is accurate as of the posting date but may not be accurate in the future.

The Harsh Realities Of Caving Into Emotional Trading

Wow, what an emotional trading day and week thus far. What John said Wednesday in the member’s comments could not be more accurate for most people. “Only thing scarier than shark week is FED week!”

Luckily we safely navigated the turmoil and FOMO brought on by FED announcements on Wednesday, May 4th.

  1. We knew it would be choppy and that trades should only last hours to a day, and you must actively manage positions.
  2. Earlier this week, I mentioned the only things I liked were UUP, UNG, and SVXY. So far, UUP is flat; given the recent market sell-off, that’s a win. UNG is up 15%, and SVXY rallied 7.2% in the last 24 hours. These were not official trades, but I gave trading tips and updated you each day and how to handle them if you were to trade them. Get in, make money, get out.
  3. Wednesday’s Fed rally sparked FOMO buying, indexes hit resistance, became overbought, and had a cycle high. Today investors bumped shares with the panic volume indicator on the downside, spiking over 31 yesterday afternoon. Temporarily.
Emotional Trading

Overall not much safety during panic selling like this, and it’s the reason why I don’t believe in holding stocks in a downtrend or bear market. I get pushback all the time about holding cash, but the answer as to why I do is simple.

Why You Want To hold cash vs Own Stocks

All I have to do is ask:

Would you rather own stocks because you like owning stocks and lose 25-60% of your money if we enter a bear market?

OR

Would you rather have a ton of cash waiting for you to buy your favorite stocks at a much lower price, earn more dividends, and make bigger returns at some time in the near future?

Simple answer….or is it?

That last part, “make bigger returns at some time in the near future”, may throw a kink into some of your answers. It’s like that test they do with kids where they offer one cookie now or wait five minutes, and we will give you four. Most people take one cookie, unfortunately, and it defies my question and logic = frustrating!

This leads to the most frustrating part of what I do. I have watched trader after trader make the same mistakes for the past 20 years. They go through the cycle of thinking the markets are amazing, to having a big winning stock trade that hooked them, to emotional FOMO-based trading, to the eventual closing of their trading account. They get crushed both financially and mentally. No matter what I do to help, most are driven by their emotions, which by the way, is the most powerful decision-making force we as humans struggle to control.

The reality is most traders would rather trade and hold stocks no matter what direction the stock market is going, and here’s why:

  1. They think they should (lack understanding of risk and position management).
  2. FOMO, they fear missing out on potential gains and don’t want to be left behind.
  3. They crave the risk/excitement (the rush of trading is like gambling, it is addicting).
  4. They cannot contain their emotions and struggle with exiting both winning and losing Trades.

How do I know these things?

Simple, I used to think and trade that way. And it was days like WEDNESDAY when I blew up one of my trading accounts trading ES mini futures. In one day, I lost everything I had!

Facing the Reality of emotional trading

Yesterday afternoon I relayed this story to my subscribers so that they might fully understand why I spend so much time educating people about cash being a wise position when the markets are in the state they are in right now.

The day I blew up my trading account I was down so much money I could not sell, so I just kept averaging down, waiting for the intraday bounce. Well, it never came, and the only thing that did come was the closing bell and margin call that broke my account, my confidence, and my dreams.

I never did tell my then-girlfriend and now-wife about that one. I felt like a total loser, my confidence crushed, and I got depressed for a little while. That was the defining moment in my trading career.

To give up, or to trade like it’s a business and do all the proper things that I hated to do like: sell losing trades and live to trade another day, smaller positions, fewer trades, stop trading leverage (futures and 2x 3x ETFs) because they made me too emotional, and to wait for trades to form vs. finding trades that may not be real setups, etc. I say all of this in hopes that it connects with some of you in the same situation.

You either had a very stressful day and lost a lot of money, or your thought Thursday was incredible to watch and/or trade because you understand market movements, risks, how to trade it, and know there will be a lot more time and price action to earn consistent oversized returns later in a favorable market condition.

I share my analysis, thoughts, and experience with you to help prepare you mentally and emotionally with your portfolio for days like this.

And for the record none of the price action, this week, was anything out of the norm. Wild, sure, but this is typical price action in a bear market.

how we CAN HELP YOU live to trade another day

At TheTechnicalTraders.com, my team and I can do these things:

  • We reduce your FOMO and manage your emotions.
  • We have proven trading strategies for bull and bear markets.
  • We provide quality trades you can trust.
  • We tell you when to take profits and exit trades.
  • We save you time with our research.
  • We provide above-average returns/growth over the long run.
  • We have consistent growth with low volatility/risks.
  • We make trading and investing safer, more profitable, and educational.

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Learn how we use specific tools to help us understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, we expect very large price swings in the US stock market and other asset classes across the globe. We believe the markets have begun to transition away from the continued central bank support rally phase and have started a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern begin to drive traders/investors into Metals and other safe-havens.

We invite you to join our group of active traders and investors to learn and profit from our three ETF Technical Trading Strategies. We can help you protect and grow your wealth in any type of market condition by clicking on the following link: www.TheTechnicalTraders.com

Chris Vermeulen
Chief Market Strategist
Founder of TheTechnicalTraders.com

Panic Selling And The Potential Cost Of FOMO – Video

Chris Vermeulen sits down with Jim Goddard on HoweStreet to discuss the recent massive panic selling in the stock markets. Other than cash, natural gas and the US Dollar are the only two safe havens at the moment. Foreign investment, for example, will move to the currency they believe in the most and right now that is the US Dollar.

When fear spikes, people being to liquidate every asset they own no matter the price. A ratio of over three on the panic selling indicator indicates fear is taking over. Yesterday we peaked at 31 – an extreme level. While this may be a day trader’s heaven, everyone doing longer-term trading should pretty much sit back and watch things unfold.

Should you hold onto stocks in a downtrend or during the lead-up to a bear market? The short answer is no. Why watch your money disappear just because you want to be in the stock market. Ask yourself this: would you rather miss out on a 4-5% return or save yourself from a 40-60% market correction?

The reality is that if we are entering a bear market it could take between 4-18 years to get back to previous highs. Not many people can wait that long for their accounts to recover. Can you?

TO LEARN MORE ABOUT panic selling – listen to the podcast

TO EXPLORE THE STRATEGIES IN THE TOTAL ETF PORTFOLIO, PLEASE VISIT US AT THE TECHNICAL TRADERS. YOU HAVE MORE TO GAIN THAN TO LOSE WHEN SEEKING INFORMATION!

Disclaimer: None of this material is meant to be construed as investment advice. It is for education and entertainment purposes only. The video is accurate as of the posting date but may not be accurate in the future.