Tennis legend Roger Federer gave the commencement address at Dartmouth earlier this week… and it was dynamite.  I want to share part of his speech with you because I think it has some important lessons that can make us all better investors. When it comes to being great at anything, be it tennis or trading, the importance of the mental component can’t be overstated. There’s a big difference between simply going through the motions and actively trading “in the zone.”  The last thing you want to be is a trader that responds to every headline and price swing in the market. So, what you need to ask yourself is this: Do you want to be right? Or do you want to make money? Because in markets, there’s a huge difference. Before I explain, let’s hear right from Federer… The Biggest Winners Keep Things in Perspective Federer’s speech to the Dartmouth Class of

Most markets are closed over the weekend, so I often use the time to get ahead on analysis. You see, the market is kind of like Mother Nature – it doesn’t wait for you, me, or anyone else, or whatever we have planned in our lives. It’s important to me that you know what’s going on in markets, not just at a surface level, but with respect to its internals as well. After all, this is where the most profitable opportunities germinate. If you’ve ever watched one of my sessions in the TheoTrade chat, you know that I like to take a top-down approach to markets. So I think it’s a great idea going forward  to review the performance of various sectors in the S&P 500 to share a deeper story…  Every Sector Behaves Differently The venerable S&P 500 is divided into 11 sectors and 24 industry groups: Certain sectors

A couple weeks ago, I shared a really intriguing trade recommendation for Nvidia, which has become the largest and most important stock in this market. My trade instructions were: “Buy NVDA on a close above $950.02 with a stop loss on a close below $887.47. Target $1200.”  I sent out the trade on May 16, and it triggered on May 21. After a solid rally for a couple weeks, it hit my upside target of $1200 on June 5, leaving fellow traders with a solid 26% gain against a barely 0.05% rise in the broader market. Here’s how and, just as importantly, why we put on the trade in the first place… Confession: I’m a Big Chart Guy I’ll level with you here… I can’t tell you how many hours over the last 12 years or so I’ve spent observing trends, patterns, and momentum. I wouldn’t go as far as calling

Aside from gold and the goldbugs, I can’t think of another asset class that fires up and drives those “animal spirits” the way cryptocurrency does. It’s been around 15 years since Bitcoin made its “Pizza Day” debut on markets, but it wasn’t until the mid-2010s that it started to gain some mainstream popularity. I must admit, I bought my first Bitcoins back in 2014 for around $350… but unfortunately, I didn’t hold onto them. Somehow I don’t think I’m the only one with a similar story. It’s easy, and quite frankly, even a bit lazy to think back and say, “If I’d only held onto those coins from before and never sold – I would be so rich!” But this isn’t just harmless bittersweet nostalgia. I’m here to tell you this way of thinking is actually a dangerous psychological trap. Besides, back in 2014, I wasn’t using these techniques to help

I’m sure by now you’ve seen a headline or two about Nvidia’s latest earnings, and their massive beat. The company reported a 600% profit explosion, largely due to AI-driven segments of their business. In response, the stock gapped up and is now trading at new all-time highs. The company is now worth more than Germany’s entire stock market, and more than Tesla and Amazon combined. If your first thought in response to these facts is, “this stock’s in a bubble”, I would agree with you, and here’s why: How to Play NVDA Stock Bubbles get a bad rap in the financial world, mainly because of two reasons. The first is that people that think they are smarter than the market refuse to participate, and the second is because those that actually do participate often end up losing their shirts when the bubble finally bursts. But guess what? Bubbles are actually

It happened again. Meme stocks like Gamsetop (GME) and AMC Entertainment (AMC) had a round trip again, leaving countless retail investors in the dust. The apparent culprit behind the boom-bust in these names was an anonymous poster named “Roaring Kitty.” Whether or not this individual was responsible for the rip (and subsequent rug- pull) in these stocks is up for debate. But in my most recent TheoTrade evening newsletter, I warned traders to stay away from these stocks. Listen, I’ve been around in this business long enough to see a disaster coming before it happens. It doesn’t take a crystal ball to realize that a stock that rips more than 100% in a single day is bound to give back a fair amount of the rally. The only way to last in markets in the long run is to have a set of timeless principles, and these three are some

My time over in Europe has finally come to an end, and as I fly over the Atlantic Ocean heading back towards the United States, I was just thinking of some economic word play behind the word currency. I’ve also been working on a new Mastermind class and trading pattern that I’m eager to show you in the coming weeks. So stay tuned…  Periodically, I like to modify the spelling of words to hammer home a point. One example of this is when I spell patience as “pay-tience” to reinforce the importance of always making decisions with a level head in financial markets. So, now, I want to introduce you to my modified spelling of the word currency as “current-seas.” At first thought, you might be thinking – what the heck does this have to do with financial markets?  But hear me out on this, because it bestows an important

There’s a Lot More the Ancient Romans Can Teach Us About Modern Banking My travels in Italy are still ongoing, and I decided to come out of the countryside and head to the capital for a few days. It’s been about 10 years since I last visited Rome, and, of course, my life has changed quite a bit since the last time I was here. I decided to stay in a hotel right in the center of the Roman ruins; I can see all the monuments on the tourist Top 10 lists from my room.  Admittedly, for someone who has spent most of their time in Italy in rural areas, Rome’s a unique experience for me. Rome’s topography is famously marked by seven hills. One of the most famous, if not the most famous, is Capitoline Hill. Today, the hill is well known for its piazzas and museums, but it actually

  I’ve been over in Italy the past couple of days, enjoying the geographical and time-difference arbitrage to the United States’ markets. It’s rather peculiar having the market closing at 10 o’clock at night instead of 4 o’clock in the afternoon, but it gives me much more freedom during my mornings, so I can’t complain. Granted, as a futures trader, the market is open 23 hours a day, but the volume is nowhere near as high as it is during the main trading hours in the U.S.. Not to mention, it’s become much less expensive as an American in Europe since the dollar has been so strong, and the good news for us stateside is that I think it will become even more economical in the near future. The “friendly” exchange rate, slower pace of life… and the omnipresence of 2,500-plus years of history… have put me in a contemplative

  Real markets matter. They dictate everything.  The bond market has a reputation for where the “smart money” plays, but it pales in comparison to the size, magnitude, and importance of the currency market. In fact, I would argue that everything that happens in financial markets is ultimately downstream from currencies. I’ve said it before, and I’ll say it again – capital is like matter (from science class). It is never created or destroyed. It merely transfers from one country, asset class, and sector to another. And it all starts in the currency market. So, if you’re not paying attention to this one important currency right now, you could be oblivious to the biggest crisis, or even better, opportunity of the year. (jump here) People love to rag on the Federal Reserve for their experimental monetary policies over the years, and for good reason. But here’s the thing – although