It’s summertime and the living is easy. And the trading is boring.
As much as we like to think of trading as exciting and fast-paced, markets get slow sometimes and summer is one of those times. There’s less trading to be done or to get excited about; seasonality just works that way.
But when the markets slow down, you can improve your trading and take advantage of the slow-motion. That’s particularly true right now – with the markets as extended as they are – when I think it would be fantastic to be a new trader.
I would spend the summer market doldrums watching educational videos, reading high-quality books recommended by seasoned traders, working with and learning from mentors/analysts, and paper trading. Adding to this summer of limited trading opportunities is that we are in a wait-and-see mode with health care and tax reform drama under a president who seems unlike anyone who has held the office before.
Before you can earn in the stock market, you first have to learn. Test what you are learning from all of those sources and experts by paper-trading until you are nice and green before putting real money to use in the stock market. This is exactly why I’m uploading a brand new educational videos to my website every day until I run out of educational content. I expect to be going at it for a year. It took me about two years to make the necessary adjustments to move from an average trader to an above-average one, and I know that kind of time frame is common.
You’ve got good conditions now to test yourself on paper. The markets are at all-time highs and volatility is near all-time lows. I don’t like trading that correlation — it can make trading boring – but any chance to learn from market conditions will pay off down the line. Now’s the time to learn, setting the base for earning when conditions for real trading improve.
Davis Martin is the head trader at Dailyprofitmachine.com. He trades SPY calls and puts and swing trades individual stocks and stock options. His favorite book to get started learning the options market is “Understanding Options” by Michael Sincere.