You’re a “Beach Trader” Now

We enjoyed a rare warm spring day at Lake Superior over the weekend.

While most of the country is venturing outside in t-shirts and sunglasses to bask in the improving weather, our 65-degree day was merely a temporary reprieve. In fact, the temperature is already set to dip back below freezing this week…

But I took full advantage of the sunshine, looking forward to the future warm-up and bringing out the summer furniture to prepare for the seasonal shift.

My sign that it’s “go-time” is when I can install my beach stairs. This past winter, the Lake Superior gales did epic damage to the shoreline and uncovered old deck foundations that had been buried by the shifting sands of time. A rebuild of this newly discovered boulder wall will have to wait until the ground is frozen for heavy trucks and excavators…


Setting up for summer opportunities on the beach…

Back to this summer season…

As with trading, some are ready for the change, while some are not. I always say there’s no such thing as good or bad markets. We can make money in any and all conditions. Opportunities are everywhere! You just have to know where to look.

The ability to trade any market, anytime, from anywhere has changed everything. And yes, they’ll soon bulldoze the shoulder-to-shoulder trading pits of the past as well. We’re all “beach traders” now.

Our use of high probability, limited risk options perfectly fit the beach trader lifestyle. The psychology of respectfully setting up for whatever the markets (or the weather) throw at you is a mindset that does wonders for success.

Patience is key. I know not to put out my deck flowers yet as frost is still a risk. But I’ll be ready when Mother Nature gives the signal…

Keep it In the Money,

Alan Knuckman

Alan Knuckman
Editor, In-The-Money

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Chart of the Day: Tech Leads the Way

Greg GuenthnerStock market strength continues this week — and the usual suspects are leading us higher on the comeback trail.

The big tech stocks are once again in the driver’s seat, propping up the averages and guiding the Nasdaq higher. Facebook, Google, and Apple had already posted gains approaching 4% on the week by midday Tuesday. Meanwhile, investors are also recovering from Amazon’s lackluster Q1 earnings as the stock surged to start the week, consolidating back into its late-April range just below all-time highs.

Another impressive push higher from big tech is sending the Nasdaq back toward last week’s highs. That puts the tech-heavy index just about 2% from breakeven on the year. Another 10% gain would send the Nasdaq to new all-time highs.

COMPQ chart

To put this in perspective, the S&P 500 would have to rally more than 17% to match its all-time highs, while the Dow would need a 22% boost.

Trading Tip of the Day

“A loss never bothers me after I take it.”

— Jesse Livermore

As the market’s comeback move continues, it’s important to remember to always honor your stop losses. Some traders prefer to set automatic stop losses. Others use mental stops. Your particular strategy doesn’t matter — what does matter is that you know when you are going to get out of a trade before you buy.

It’s tempting to hang on to a losing trade just to see what will happen. But this type of wishful thinking typically only causes mental anguish and leads to deeper losses. Cut your losers and let your winners run. It’s the ultimate market success strategy.

— Greg Guenthner

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Alan Knuckman

Alan hails from the home of options trading in Chicago, where he began working as a clerk on the floor of the Chicago Board of Trade (CBOT). Beginning with his days on the floor, Alan’s worked with all aspects of the options markets for the past 25+ years.

Transitioning from a clerk to a floor...

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