My bag is packed. I’m going on vacation for a few days, and with that I wanted to take a bit of time today and go through the idea of trading on vacation.
I received a lot of questions on this, and obviously here in August, a lot of people still are on vacation or are just about to go on vacation, and so the question received is — should you trade on your vacation? My personal opinion is if you’re a day trader or something really short-term, I would probably avoid that…
But there is an easy way to follow the market, and quite frankly, while I do this going on vacation, and I’m literally doing the sort of routine right now just before heading out the door in a few minutes. This is really something that you can do all the time. You don’t need to do more than this to follow the market.
I break the market into essentially sectors and groups and various ETFs to look at other asset classes as well. But I want to see what the most important parts of the market are doing, like the tech stock, the S&P 500, maybe bond markets, financial stocks. I don’t need to look at the computer all day to know that. What I do is I set a few alerts on some key ETFs or key indices.
Let me show you what that looks like (This is all broken down in the video above). I actually just finished this just a minute ago on the S&P 500. I just made some very simple alerts and I will be receiving email alerts on these. What I did is I set an alert above the current market price, so if we were to break above the current range, I’d get alerted, and if we have a strong enough bearish reversal getting below two days ago’s midway point, I’d be getting alerted there, too. And I’m going to do the same thing … I do this … this is really how I follow the market in general, but particularly on vacation, this is what you want to do. At least first if you want to be somewhat involved in the market.
Then you’ll do the same thing say like in the bond market, TLT. You’d set an alert at the low end of the recent range which is down here and maybe at the upper end of the recent range which would be somewhere up here. And you do that, and again, the whole point of it is that you don’t have to be rushing back and checking on the market all the time. You’re going on vacation and God knows, I’m looking forward to a few days off here, but I’ll still be getting alerted here and there if something important happens, and then I can also place a trade.
Again, this is not for everyone. Not everyone has to be kept abreast of the market during vacation, and I don’t suggest you actively trade during vacation. You do need time off. It’s important, body and mind. Did I just do body and mind? I guess body and mind, I don’t know.
Anyway, the point is that you can still follow the market by getting alerted by text messages. Maybe it’s an email. That’s what I do. If I get alerted on the important moves in the market, then that’s really good enough for me. I’ll do that again also for the financials, maybe the XLF ETF. I’ll do it for the QQQ’s and NASDAQ 100. I’ll do it for some important stocks, say like for the QQQ’s, if we were to break above say 182, and certainly I’ll set an alert down around 176 or so.
Those are the important levels I want to be focusing on, and then I’ll get alerted if something important happens.
I’m also going to keep in mind that, like I said last week in the video, August tends to be a binary month, so either it is extremely boring or it gets crazy busy. If something happens over the next few days while I’m on vacation, something of importance, then this may be a signal that we’re going to have a crazy month and then I’ll get alerted. But if nothing happens which, quite frankly, a lot of times is the case in August, I don’t want to have to chase every flicker and kick on that. I prefer to take some time off.
I hope this is helpful, folks. I’ll see you guys in a few days when I’m back. Have a good week.
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