Trading Justice

Join Matt and Tim for their discussion of the Glass Steagall Act and its effect on the consumer. The Glass Steagall Act was a law from 1933 that banned commercial banks (those that you do checking and have an savings account with) from doing any investment banking (securities trading and the like), and vice versa. The Act was put into place as a consumer protection measure to keep commercial banks more conservative in their business actions after the failure of more than 5,000 banks during the Great Depression. Over the years, opponents of the legislation lobbied against the Act, stating it was to restrictive to business and banks' ability to seek revenue. Starting in the 60's, federal regulators started interpreting various actions by commercial and investment banks to be permissible under Glass Steagall that may not have been allowed earlier in the legislation's life cycle such as affiliation between the two and bank underwriting of corporate debt. By the 80's the Act was all but dead, and was fully repealed in 1999. After its repeal, intermingling of commercial and investment banking saw the creation of instruments such as mortgage-backed securities and other complex bundling schemes. You may recognize that as one of the major factors that lead to the 2008 financial crisis. Even with the damage that was done, no further restrictions have been put in place to prevent such an action from happening again. However, there are increasing calls for a form of Glass Steagall to be re-implemented. Whether it will or not remains to be seen, and would likely have to wait until late 2017 at the earliest.  

Join Matt and Tim on the importance of building a team for your personal trading business. With day trading being a solo activity, you may think that there's no need to create a personal team for yourself. It's just you, your computer, and the market, right? Not so much, actually. True, trade execution is all about you making the final call, but why work alone? Trading can be a lonely and draining activity. Being a tweet or forum post away from other fellow traders can take that edge off, as the folks you're posting with know what yer going through, as well. Furtherd iscussing and figuring out new strategies together can be rewarding for all involved. You might think keeping a killer strategy to yourself to prevent it from being overused, but the market is so big, it doesn't really matter.Lastly, you never know where connections may lead. Bridge building can end up introducing you to surprisingly interesting and important people for you. Not quite sure where to start building your team? A good starting point are mentors. Mentors can serve two purposes: a power hitter on your team for the tricky stuff, and possibly to introduce you to other traders at about your same level the mentor knows themselves to work with. Trading and learning with other folks at your same skill level lends the ability to commiserate about the same struggles you're all going through and share the successes with. To that end, trading workshops (both online and in-person) is also a good place to meet like-minded folks to share ideas with. ...and don't forget Tackle Trading; its forums are full of fellow traders down to talk trade news & strategy, as are the coaches shows.

Join Tackle Trading's Noah Davidson for a discussion of protective options from Tackle Trading's Cash Flow Club. Options are more than just cash flow generators. While they do indeed do that well when you're the seller, they also act as insurance to the person buying the option (provided the buyer knows what they're doing). Protective options allow a trader to hedge against price volatility for a security or even repair a trade that's gone badly if implemented correctly. Puts and covered calls do generate cash at the cost of capping the maximum amount of profit you can pull from a trade before being exercised by the buyer of the put or call. Done correctly, selling such options also have a high probability of success in generating the expected cash. ...and even if the put or call is exercised, you get the money from the sale all the same to be reallocated elsewhere in your portfolio. However, calls and puts can also help repair trades that have gone badly, lowering the break even point for the trade or occasionally bringing a bad trade back into being a good trade when properly executed. If you'd like to join in on Cash Flow Clubs in person in the future, join Tackle Trading and you'll be able to see all the charting and examples, too! You can join right here!

Join Producer Phil as he takes you back through a the highlights of a few of the show's past guests. Tackle Trading's had a variety of guests over the past few years, and today, we're highlighting three of them for you. First, Jake Pelly: a trader so adept that he's never had a naked put trade go against him. He also understands the power of compound interest and doesn't let greed get the best of him in pursuing returns. Next, we'll share a bit of time with Clint Coons, a tax expert when it comes to day trading and day traders. Tax season may be over now, but if you're day trading, it's good to give a listen. Lastly, we'll join Tim and George Antone, entrepreneur and author of The Wealthy Code, a book that goes over the concept of money and general mindset in approaching ventures.

Join Tackle Trading's Gino Poore, Noah Davidson, and Matt Justice as they discuss the impact seasonality has on the markets and how historical market data can make prediction more reliable. In this Coaches Show audio replay, the Tackle Trading coaches cover more than just market conditions and economic news for the week. While market conditions were indeed covered, the focus was seasonality's effect on markets and how historical seasonal data can help make predictive models. Seasonality in trading is much like you may picture the word when it comes to the retail space: certain sectors consistently perform better or worse during specific times of the year. For example, retail tends to pick up toward the end of the year thanks to the rush of holidays that occur. In mid-Spring, it tends to be energy and basic goods that do well; there are no major holidays for a long stretch, and with temperatures switching up, energy consumption increases after the mildness of early Spring. In taking this historical data of sector performance over the years in each month, patterns emerge that carry over from year to year, which makes predicting what may happen in the markets more reliable (but never 100% certain or risk-free).

Join Producer Phil as he takes you back through some of Trading Justice's funnier moments in the podcast. Trading is serious business. Your money is on the line, and treating trading like it's a business is a prudent thing to do in order to keep a clear mindset. However, even in business, there's a time for taking a break. Producer Phil has for you today such a break. He's gone through past podcasts and found funnier moments between Matt, Tim, and their guests to share with you. Come for Matt's theatrical inspirations, stay for the Burning Man stories.

Join Tackle Trading's Gino Poore, Noah Davidson, and Matt Justice as they discuss the impact seasonality has on the markets and how historical market data can make prediction more reliable. In this Coaches Show audio replay, the Tackle Trading coaches cover more than just market conditions and economic news for the week. While market conditions were indeed covered, the focus was seasonality's effect on markets and how historical seasonal data can help make predictive models. Seasonality in trading is much like you may picture the word when it comes to the retail space: certain sectors consistently perform better or worse during specific times of the year. For example, retail tends to pick up toward the end of the year thanks to the rush of holidays that occur. In mid-Spring, it tends to be energy and basic goods that do well; there are no major holidays for a long stretch, and with temperatures switching up, energy consumption increases after the mildness of early Spring. In taking this historical data of sector performance over the years in each month, patterns emerge that carry over from year to year, which makes predicting what may happen in the markets more reliable (but never 100% certain or risk-free).

Join Tackle Trading's Gino Poore and Noah Davidson as they discuss the trickiness of trading during earnings while also covering market conditions for the week. In this Coaches Show audio replay, the Tackle Trading coaches cover more than just market conditions and economic news for the week. While market conditions were indeed covered, the focus was largely on trading through earnings. Earnings, a quarterly event where publicly traded companies post their performance for the previous quarter, causes waves for the stock in question, and sometimes even a sector. You can expect gaps up or down, but not necessarily in the direction you'd expect. Even if a company outperforms earnings, the price can plummet for a few days, or raise on news of underperforming. Simply put, it can be unpredictable. Newer traders are generally advised to trade with caution while keeping an eye on when earnings is coming up for a particular company they own, or even exit entirely while earnings is happening. Such decisions are left to the individual trader, but care is always advisable.  

Join Matt and Gino for their discussion about the differences between delta traders and theta traders. There are two major greeks in trading: delta and theta. Delta represents directionality of a trade and its probabilty of profit, while theta represents time decay in an option trade. There are two other greeks, as well; vega and rho. They aren't covered as much, but vega represents volatility movement while rho represents interest rate change. As you can imagine, rho doesn't get much attention of late. In a way, delta and theta trading also represent different trading styles, as well. Directional trades require reasonably frequent maintenance to ensure they stay in the money and fine-tuning should a particular security start going the opposite direction. They can score homeruns, but can require a fair bit of work. Options, on the other hand, earn you cash flow so long as they're active. Provided you're the seller of an option, and it's set up correctly, it will have a decent percentage chance of expiring worthless for who bought it; leaving you with some cash in your portfolio. Even if you get assigned (that is to say the option doesn't expire worthless and the buyer takes your security), you *still* get paid even then. Granted, you'll have to go purchase that given security again if you want to stay in it, but that's just how it rolls sometimes. That's not to say selling options is strictly easy. It does require training to do correctly, and doing it wrong can easily destroy your account (particularly if you start trading naked puts without knowing what you're doing). Also, if a particular option looks like it will be exercised come expiration time and you *don't* want to exit the security, it can cost some time and capital to fix.

Join Tim and Matt for their discussion about the impact earnings can have on stock price and the impact you can make on your own financial future by trading for yourself. Earnings is a challenging time to trade for everyone, new and old trader alike. Will your companies of choice beat earnings expectations? Will the market even react how you'd expect to the news? For new traders, that second question can be particularly vexing. If a company beats earnings, its stock should go up, right? Well, not during earnings. A solid earnings report can cause a short term dip in the stock's chart, while a less-than-stellar earnings report may cause a spike. Why? Essentially, low spooky action at a distance. That very unpredictability is why new traders are recommended to trade light around a particular company's earnings reports, and why strangle and collar trades (essentially trades that go well whichever direction a stock goes) are so popular around earnings time. If you're new to the concept of trading (or even to considering trading for yourself), even trading during non-earnings season can be daunting. It's your money on the line, after all. However: is it not also your money in that mutual fund that's likely barely pacing the market? The handwave of that kind of performance due to it being the professionals doesn't really go that far, either. If it's the professionals, why isn't it doing at least 3% growth every month instead of every year? That may seem like a small number, but do remember that investment accounts tend to be for the long haul (up to decades). That 3% this month may only be $20 this month, but if the funds are kept in the account, that same $20 will get added to the previous balance every month. Within years, 3% becomes living income every month. If that sounds like your jam, this episode is just for you.