What a Business

Do you think of trading as: "What a business!" or "What? A business?".

My Dad developed real estate. His projects were always successful unless he got caught by the cyclical recessions that came and went. This taught me a couple of important lessons which I apply to my business.

Firstly, when, as a boy,  I asked him how he knew that the project was going to be successful he said, "I make my profit going into the project. I do my research and then I buy the land and improve it's value by getting a building approval onto it. I then build the building while I sell it to buyers off the plan. I know it will be profitable because each step improves value."  This taught me to do a lot of preparation in my methodology and make sure that the odds were on my side when going into a trade. Assuring my profit going in.

The second lesson I learned is that stuff happens. Recessions come, wars break out, announcements are made. Don't take overnight positions.

Although I have wandered from this last lesson somewhat, I do it in a very protected way. I use options extensively as part of my strategies. The bulk of what I make comes from intraday, as it's safer. Lots of smaller risks are more comfortable than one larger risk.

So in constructing a TP, these are the things to also keep in mind. It's not very different to any other type of business in that respect. Can you imagine a business surviving if it only made profits on, say, 40% of it's sales and lost money on the other 60%?

Due to the way I envisioned today, I did NOT tweet the Gap trade. The market went down as I envisioned. I'm showing a 3 tick range bar chart today to show what I do when I want to see more or scalp. As it turned out, today this chart gave a much better entry into the ES shorts than the 5 or 6 range bar chart.  Price did the right thing and hit my Fib line targets too. This is discretionary trading.