“There’s an old adage, ‘don’t fight the Fed.’ Means that if the Fed is on a tightening course, don’t be long. And if the Fed is lowering rates, as now, don’t be short. Doesn’t always hold true, but often enough to [not] ignore. The Fed has a lot of tools to achieve its objectives.”

A mid-day report that the White House is considering steps to limit investor flows into Chinese equities helped the bears keep control, as the S&P 500 finished the week 1% lower for its worst close since Sept. 4.

Risk is still on. The trend is still up, no hedges on.

This afternoon, the crypto complex absorbed an intense downdraft, with the price of bitcoin falling roughly $1,000 and settling at $8,560.

Stocks came under pressure with the S&P 500 dropping 80 basis points, to narrow its 2019 advance to 18.4%. 

"Acceptance"

For many of us, acceptance is a hard thing to swallow. Especially when things go against us. Yet when it comes to trading, accepting the outcomes of all your trades, not just the good ones, is going to be key to your longevity.

There will always be situations out of our control that are going to see us giving back some profits. Or taking a loss. Yet just as we are happy to give ourselves a pat on the back for our wins, we also need to accept responsibility for our losses. After all it was us that pulled the trigger.

Here are a few tips and reality checks towards accepting everything that we do in our trading. Whether the outcomes end up being in our favour or not.

1. Failure can follow success / Success can follow failure

It’s easy to get over confident when you have a few winning trades in a row. It’s also easy to get down on yourself following a few losses. Yet this is the name of the game. Accept that there are ups and down in this business. So long as you have a solid methodology, don’t allow your psychology to second guess it.

2. Understand that there are risks in every trade

Everything in life is a risk. You can wrap yourself in cotton wool and never go outside the house to lower your risk of failure. Yet that is not what life is about. After you have taken a trade, if you are constantly looking at your phone and swearing at it when your trade goes against you, then you have not accepted the consequences of risk. When you do accept these consequences, sure you might swear about your loss. Yet you’ll get over it quickly and move onto the next trade.

3. Markets WILL move against you

Even your best trades will spend time back filling before moving forward again. It is the nature of the market. Accept the process and don’t panic yourself out of perfectly executed trades.

4. No one knows what the markets are going to do at any given moment

We say this a lot, yet as soon as we accept this fact as traders, life suddenly becomes a whole lot easier. Add this one to your affirmations and a weight will be lifted off your shoulders. Ego is about thinking that you know. Trading is about processes. And the discipline to follow those processes no matter what so called experts are yelling at you.

5. You are going to be wrong – A LOT

Accepting that trading is different to nearly every other profession is important. For one, you don’t have to be right most of the time to keep your job. Some of the most profitable and successful traders only win half the time.

Yesterday the Fed came in with a .25% rate cut, this rate cut should put a floor until big cap stocks pay out dividends equal to the 10 year note or higher.

The trend is now up, no hedges on. Risk on.

Stocks caught another bid, with the S&P 500 extending its gain for the week to 1.2% and pushing the broad index to within a few basis points of its July 26 high.

"Recap Sept. 3"

A dip below 50 in the August ISM Manufacturing PMI (its lowest since August 2016) helped the bears get the upper hand as the S&P 500 lost a bit less than 1%, while Treasurys rallied again with the 10-year yield falling below 1.47%.  Gold rose above $1,550 intraday for the first time since April 2013, while WTI crude fell back below $54 a barrel and the VIX finished at 20.

"There always remains an opportunity to make a new start."

Though it may not seem so when you first encounter a serious blow, you can never lose two of the most important assets you have. These are the power of your mind and your freedom to use it. Once you have turned them to understanding what laid you low, you can begin forming new plans. You may not have the money you once had; you may lack the allies you had cultivated. But you still have the benefit of a universe that eventually rewards honest effort, as well as gaining the experience of mistakes you will never make again. Remember, no matter where you are now, whatever you can conceive and believe, you can achieve.