Are You Trading In Your Comfort Zone?

Taking money from other people is a hard skill, particularly when everyone is trying to take money from you…

Is your comfort zone holding you back as a trader?

As James Altucher told me, it doesn’t matter what age you are: 20, 40, 60 or 80: you improve and enjoy life when you dive into the deep end of the pool, swim for your life, and survive. YOU LIVE!

My best trade this year was when I bought GBTC (Bitcoin Investment Trust) and made about $2,000 in one week. The trade terrified me. GBTC isn’t even listed on Finviz. In fact, it’s an over-the-counter listed stock.

Everybody around me thought I was crazy. I got people warning me that I could lose everything.

These traders that were freaking out on my OTC trade meant well. But they were speaking from their own comfort zone.

If you are unwilling to go out of your comfort zone, then your returns will be mediocre at best.

The longer we trade, the more we form the habit of trading within a comfort zone. But life teaches us that the greatest gains in life come from going outside your comfort zone.

If you’re married, you know this. Remember when you got up the courage to communicate with a woman you didn’t know? It took guts to ask her out on that first date. It took more courage to go for that first kiss. But had you stayed in your comfort zone, you’d still be single and alone and you probably wouldn’t have a daughter or son either.

If you have a job in a corporate environment, you know this. Maybe a task came up that you were nervous about doing but you went for it anyways. You kept doing tasks you weren’t comfortable with but gradually you got better at all of it. Then you got a new title and a raise. Had you not been willing to step outside your comfort zone, you’d still be doing the same tasks you’ve always done and you probably wouldn’t have gotten those raises over the years either.

Just last week I had another huge win in silver. I told you guys I wasn’t trading commodities anymore because I wasn’t good at it. I imprisoned myself in a comfort zone of my own making. Last week it felt like reckless abandonment when I went long on a swing trade in silver. I was so nervous. I couldn’t sleep very well at night. People say if you can’t sleep well at night you shouldn’t be in the trade. I think that’s nonsense. If you can’t sleep well at night it means you’re pushing out of your comfort zone which is exactly what you should be doing as a trader.

I made big money in an options trade in Illumina years ago. I then lost everything trading naked options with Scottrade. I switched from Scottrade to Etrade and Etrade wouldn’t let me do naked options. I spoke with Etrade over the phone. I even lied to them about my experience with options. They still wouldn’t give me a naked options account. I said screw options. I don’t like options because brokerage firms like Etrade are little girlie dramas about it. But at least I tried. Now I’m not interested in options. Failing at something is ok. At least you tried. There’s no shame in trying, and you have education to gain. Please don’t send me website links about different options brokers. I’m not interested in trading options anymore. What interested me yesterday, may not interest me today, but maybe it will tomorrow, or not.

The point is, you should be doing SOMETHING outside your comfort zone for the lessons in life invariably are the same lessons in trading.

If you always stay in your comfort zone, you’ll be lucky to keep up with the S&P 500 average. A 401K is for people who want to invest in a comfort zone. Gone are the days of sticking your money in a 401K and then looking at it 40 years later to discover you’re a millionaire. Maybe that was possible between 1960 and 2000 when the market and economy grew so rapidly. It’s not possible today.

Nothing great in your life ever came from just staying in your comfort zone. Your trading is no different.

The discomfort zone is NOT about blowing up your trading account in a risky penny stock. It’s about finding happiness and successful trading outside your comfort zone.

So I traded silver for the first time since 2012.

I was terrified. And I thought after I took the position that I was going to lose everything. I had a panic attack.

Why did I just buy silver? It’s down 10 cents from my entry in just a few minutes. I’m going to lose everything. Maybe I should just sell now and get out of the trade so I don’t feel so much discomfort.

Then a voice said don’t be a sissy b*tch Lance. You’re middle-aged and losing your hair and so maybe your male-hormone level is low or something because you’re being girly about this silver trade.

That’s right, I thought. I got angry and just turned off the darn computer and walked away from my trading desk. I didn’t look at the trade for another day because I was freaking myself out too much.

Here’s how the trade worked out:

I was reminded that if a stock bounces repeatedly off a support level, it’s ok to bet that it will bounce off that level again even if it’s linked to a commodity like silver that I’ve been afraid to trade for the last 5 years.

Was this trade fun? No. It was pure hell. But when you push through your fear, go outside your comfort zone, a new world of possibilities opens up for you to explore.

I’m happy for now until my next losing trade.

If you found this lesson helpful, please share the positive message with your trading buddies.

Black Friday Hits All-Time Record of $3.34 Billion

Black Friday sales hit an all-time high record of $3.34 billion or 21.6% growth year-over-year. Mobile accounted for $1.2 billion of those sales, a 33% increase from the previous year. TechCrunch writes

Combined with yesterday’s $1.93 in online sales on Thanksgiving, the two days are expected to close out at nearly $5 billion in sales. Top-selling toys included Lego Creator Sets, electric scooters from Razor, Nerf Guns, DJI Phantom Drones, and Barbie Dreamhouse.

The Doctor Of Common Sense says about the major indices hitting all-time highs, “Do you believe that this is a coincidence? I’ve been telling you everything that liberals do their whole policy with their communist and social policies, they never work. All you have to do is look at how bullish the market is.” The Doctor Of Common Sense also uses Black Friday’s record sales as proof of failed Democrat and liberal policies although he fails to logically back that claim up. Check out what Doctor Common Sense has to say in the video below.

Nothing against The Doctor Of Common Sense but this is what I was afraid of. When everyone is coming out declaring how great Trump is and how bad liberals have been and citing the spike up in the stock market as proof, that’s when the market is most likely to take a turn down IMO.

This Trump Rally is mostly nonsense and hype IMO. Trump hasn’t even taken office yet. The P/E on the S&P 500 has moved higher since the election and is not supported by anything fundamental.

On the chart above, the gold line is the P/E ratio of the S&P 500 which is at a troubling high of 25.46. The red line is earnings, and the blue line is the S&P 500.

If you thought the market was overvalued before the Trump election, you must be freaking out over this latest spike up.

The stock market going up is not proof of failure by Obama and Democrats. The stock market is going up because there are more buyers than sellers and from short covering. From a market psychology perspective, greed is prevailing over fear right now. That’s it. Assigning stock market direction as proof to justify your personal political bias will result in the rapid demise of your trading account.

Don’t get me wrong; I’m a Trump supporter as you already know. But let’s be real about market valuations. Chasing markets higher because of Trump mania is a dangerous game IMO. I think a lot of amateur traders and investors have the potential to get hurt from this Trump rally when it finally comes to an end.

The US Descends Into Terror As Violence Explodes Higher

Beyond any doubt, we have a horrific trend of rising armed violence across the US. I warned about this rising destabilizing violence here. At some point, something colossal and dangerous is going to happen, and it’s going to crash US markets. We could be looking at our next Black Swan event.

Below is an interactive graph that shows police being attacked across the country. The graph below proves this is a major uprising across the country. Hover over each dot to see more details about the event.

[graphiq id=”lXhLEV22QbX” title=”Police Officers Killed in 2016″ width=”440″ height=”450″ url=”” link=”” link_text=”Visualization by Graphiq” ]

Just in the last month, we have seen the worst mass shooting in U.S. history in Orlando. Shortly after we had the massacre of five police officers in Dallas. Next, we had the horrifying terror rampage in Nice, France. Now we have the brutal murder of three police officers in Baton Rouge in a military style ambush. Was the terrible murder of three police officers just an isolated incident of a crazed gunman? No. The Daily Caller writes

A Youtube account operated by Gavin Eugene Long and discovered by The Daily Caller reveals key insight into what might have motivated the 29-year-old black man who killed three Baton Rouge police officers Sunday morning.

Videos on Long’s account show that he was a former Nation of Islam member. He also ranted against “crackers” and made references to Alton Sterling, the black man killed by police in Baton Rouge on July 5.

Islam is the connection between ISIS and the rising armed violence across the US. How terrifying folks!

The SITE Intel Group, which monitors ISIS activity, writes…

Reacting to #BatonRouge shootings, a jihadi Telegram channel urged supporters invite “black community” to Islam and help it fight U.S. govt

I argued here that Black Lives Matter is a lot more terrifying group than most people realize. Folks, you should be terrified of Black Lives Matter. Black Lives Matter supporters and Islamists celebrated the murder of the police officers in Baton Rouge. PrisonPlanet writes

‘Black Lives Matter’ supporters and Islamists are already celebrating the murder of at least three police officers in Baton Rouge, Louisiana.

Twitter user ‘Marland X’ – whose profile suggests he is a member or supporter of the New Black Panther Party – tweeted his glee at the deaths within an hour of the news breaking.

The Republican National Convention is this week, and it is a huge target for Islamic terrorists and police haters. If Islamic terrorists or violent radical left groups strike at the Republican National Convention, it will descend this country further into chaos and fear, and that could crash markets.