Crazy (Profitable) Times

It’s been ages since the last post, for obvious reasons. Not much has changed since then. The world is still, by and large, in lockdown. I’m still taking time out from anything work-like to get on with home-schooling our youngest. And the markets are still profitable. Crazy profitable.

Things have calmed down a bit since the start of this crisis. I said in the previous post that I thought it was probably in bad taste to be posting insanely profitable charts while around the world people are dying and losing their livelihoods. That’s still the case, but at the same time life goes on. This is still my job, and I’m far from alone in trading for a living.

Trading is also not the only sector of the economy to be doing unusually well in these strange times. Airlines might be on the brink of collapse, but plexiglass manufacturers have never had it so good! With supermarkets encasing their cashiers in virtual prisons made from the stuff, production has never been so high.

Video conferencing is bigger than ever, at the expense of real estate. I imagine a great many people who are working from home during lockdown will decide that actually they’d rather like to stay working from home once it’s over (if it is ever truly ‘over’). Already big businesses are looking at their property portfolios, at the millions they spend on rent, and are asking if they really need to be providing those acres of cubes and the associated services when their employees are happily getting the job done at their kitchen tables for a fraction of the cost.

The world is changing before our eyes. In some ways we are privileged to be able to witness such a transformative time in human history. The last equivalent transformation was the internet, which slowly changed most aspects of life over the last thirty years or so. This pandemic is having a comparable impact, but is compressed into a timescale of months.

Anyway, enough of that. We’re all virus-ed out, nobody cares about my thoughts on the subject. We’re all here for the trades.

Some Trades

As I said, things have calmed down a bit since the frankly crazy early days. But opportunity is still wildly abundant. There are trades everywhere you look. Not just to the short side either. Here’s a little long by way of example:

Biotech as a sector obviously stands to benefit from the situation, and as well as offering us hope, they’ve been giving us some sweet trades. This was not the most profitable I’ve seen, not by a long shot, but it was a nice simple standard trade that made a decent profit, coming in at just over a grand for about twenty minutes spent in the market.

It’s important to point out that my trading strategy has not changed in any significant way. Markets may be going crazy, but the thing about trading based on reading the price and keeping things simple is that it works in all conditions. It’s something I’ve banged on about for years, and it’s more pertinent now that at any time since I began trading professionally last century.

Looking to the short side, there’s even more to be had. Much as I am trying to emphasise the positives, let’s face it, there’s more bad news around than good. Here’s a relatively small trade on Southwest Airlines:

One thing I have been doing recently is taking the earlier entry more often (this is still part of my original strategy). That’s because there’s a lot less risk involved in doing so. Trends are setting in earlier in the session.

This chart looks like it was a big drop, but actually the price is low so it’s not that far (Southwest, like all airlines, has lost vast amounts of its value already). The earlier entry was low-risk and added significantly to the profit.

These two trades combined made nearly two grand. In normal times that would be a decent morning’s work, but these days it’s small beer. And they were a long way from being the only trades of the day. I don’t say that to brag — I’m already feeling conflicted about posting any trades at all. But I do think it’s important to record some of what’s happening. One day we’ll look back at this time and try and remember what it was like. That day will come.

Stay safe. And good trading.