Sometimes we’re shocked by unexpected news…

When Bear Stearns collapsed in 2008, nobody believed it was even remotely possible.

Or when Kodak went bankrupt in 2012, after more than 100 years of being a leading company in cinematography and photography, people were shocked.

Or the energy giant Enron. The absolute number 1 in the energy sector, that filed for bankruptcy in 2001.

Now, when it comes to Apple, as far as I know, it is NOT bankrupt. And hopefully never will be. So I admit, the subject of this post might sound a bit misleading – but I did this on purpose. To make you think:

Could you even IMAGINE that this was a real possibility?

Could you even imagine that the headline “Apple goes bankrupt…” might one day be true?

Because when it came to Kodak, Enron and Bear Stearns, nobody could imagine it either.

Yet, it happened.

And I could keep going with dozens (or perhaps even hundreds) of other companies, that were similar to Apple that are now gone. Forever. In fact, history is full of “invincible giants”, who are now buried forever.

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Despite their size.

Despite the endless stream of arguments on why these companies could NEVER go bankrupt.

Despite how advanced and clever these companies and their people were.

And unfortunately…

The same often applies to traders too.

A lot of traders think they already “know it all” (especially during the periods where they’re making money).

A lot of traders might even think they’re “invincible” (because of a few lucky winning streaks).

And a lot of traders keep constantly underestimating the worst possible scenarios. Until they actually happen, and suddenly one day these traders are gone forever too.

Like the once famous companies.

Now, here’s the real reason I’m writing all this:

We are currently in highly challenging times.

Markets are NOT in a normal mode right now.

Big companies (including AAPL) are significantly down.

The political and economical situation globally is far from “good”.

The word “crisis” is being spelled out more by the media.

So, we’re very likely on the edge of some big changes. Possibly a new crisis. High volatility. New bear markets and perhaps never-before experienced market behaviours.

And too many traders are not ready for it, just because they believe in their “invincibility”.

Or they keep overestimating what they already know, while underestimating what they don’t yet know.

Now, of course, it’s your trading. It’s your money. And it’s your responsibility.

But remember, it is the market, who is ALWAYS smarter than us.

So, here’s my advice:

Start getting yourself ready for the big unknown.

It will very likely come in 2019.

It could be extremely rewarding for you, or extremely devastating.

So you need to be prepared.

A good way to start could be implementing Market Internals, so you know when to stay away from super-dangerous markets or when to exit positions early due to crazy market changes.

Or with the implementation of Smashing false breakouts techniques, to be more selective with your trades and only expose yourself to market risks when it’s favorable to do so.

Either way, be prepared, because we just don’t know what’s around the corner.

Happy trading,

Tomas

 

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