Right of the Chart

Dennis Wilborn talks about how a trader's attitude about being "rich" can affect their performance in the stock market. Dennis prefers the word "wealthy" to "rich." He suggests being rich is temporary, but being wealthy means you can leave a legacy that can last for generations. Hear more from Dennis on his YouTube channel: https://www.youtube.com/c/markettechtalk

Right of the Chart is hosted by Shawn Vincent, the current curator of ChartYourTrade.com.

John Frost, a student of the A.M.P.D. trading strategy, joins the podcast to talk about how he manages the volatility of earnings season -- particularly how he sets his protective stops ahead of earnings announcements. 

Self-guided independent trader Michael Lamothe says you cannot judge success on any one trade. Success results from having a system that produces good results over time. Every trading strategy will produce some losing trades, but a good trader takes time to conduct a post-trade analysis to learn from the losers.

The A.M.P.D. trading strategy uses protective stops to automatically sell positions when a price falls below a set level. Swing trader Mike Lamothe discusses how using protective stops allows him to take time off from trading without obsessing over his positions, and how protective stops allow him to reduce his "initial capital risk" when taking on new positions. 

Mark Fishman says stocks have personalities, and having success as an A.M.P.D. trader means finding stocks that match your personality -- that is, stocks that behave in a way that complements your personal trading strategy. 

Mark Fishman maintains multiple investment portfolios. He has a traditional buy-and-hold portfolio for long-term positions and an active trading portfolio where he practices the A.M.P.D. trading strategy. Each portfolio has its own mechanisms for managing risk -- the important thing is not to get them mixed up. 

Adam Sarhan says, if your risk is properly managed, the result of any single trade doesn't really matter in the long run. Success in the market comes from making smart decisions that create a good aggregate result over the course of multiple trades in varying market conditions. Anyone can get lucky every once and a while, and if you judge success by counting lucky trades, that's called outcome bias. In the market, long term success comes from patience and discipline. 

The big headline is that the Fed cut interest rates by .5%. For self-guided independent traders, that news isn't important -- what's important is how the market reacts to the news. As a presidential election looms, and the Middle East seems poised for a larger regional war, there is likely to be a lot of big news in the coming weeks and months, and Adam Sarhan has some tips on how to avoid making emotional trading decisions in reaction to big headlines.  

John Frost is keeping a model portfolio to test the A.M.P.D. strategy. John talks about using prospective stops to defend against big losses, to lock in gains, and to try to stay in "profit land." John also discusses the indicators he uses to measure market conditions and explains how he uses A.M.P.D. to decide when to get in and out of trades.  

The "D" in the A.M.P.D. trading strategy stands for "Defense," and as the markets move into correction territory, defense is key. In today's podcast, Adam Sarhan talks about how A.M.P.D. traders use protective stops to avoid big drawdowns when the market contracts, and he stresses the wisdom of aligning yourself with market conditions and not forcing trades.