Defense Wins Championships (and Enables You to Survive in Markets)

As we approach Super Bowl 50 this Sunday between the Carolina Panthers and the Denver Broncos, it is a good reminder that, despite the well-deserved attention both teams' offensive quarterbacks have received, the Panthers and Broncos also play great defense. 

Whichever team plays better defense on Sunday, in all likelihood, will win the ultimate championship, as is often the case in sports.

Will the undersized but quick and aggressive Broncos defense be able to contain the big and powerful Panthers' offense? Will the Panthers' defense prevent the big play, as has been one of their few weaknesses this season? The answers to those questions make sports fun and exciting to discuss, and by Sunday night we will know the truth once and for all. 

But when it comes to markets and speculation, the stakes are higher than even winning championships--Defense enables you to survive these markets, which is a tall task for traders, by and large. 

In a corrective market with the type of institutional selling we have seen, being prepared for it in the first place by recognizing the dearth of leadership is a good way to avoid having deep regrets. But, beyond that, accepting the certain randomness of the price action with any trades you do, in fact, take, is also necessary in terms of having a zen calmness about the short-term outcomes. 

Indeed, as long as position sizing is kept small and stop-losses are respected, defensive-minded traders should emerge from the current market cycle in as good a shape as any speculator. 

Inside Market Chess Subscription Services, we have stayed on top of the action since last year's warning signs materialized and have chosen the tight, disciplined path in lieu of swinging for the fences and preaching defense after the fact. 

Going forward, there are still opportunistic trades to be had. But we will attack them with the continued strategy of risk first, reward second. 

In addition, some exciting themes are emerging and may very well be in the first inning or so of their moves, which is a topic I will flesh out fully for Members in my full-length Weekend Video Strategy Session. 

Have a great weekend and I will see you there.