“Where is the stock market going? I don’t know, and I don’t need to know.” – Personal Mantra
Earlier in the day, we were asked a question that we would like to address …
“What causes recessions, or a stock market crash?”
“Do we think we are on the edge of a stock market crash?”
We are always looking to help new retail traders, so as we were asked the question, we would offer our thoughts, and the way we approach risk.
Our thought is that generally, recessions are caused by contractions in GDP. Two or more quarters of negative GDP. So what is our response to such situations and the possibility of such events? We say … Be the House! Casino’s lose money every day. However, over a long period of time, they know the odds are in their favor. As a trader, to a great degree you control your own payout odds. So know your odds, and always work towards being risk advantaged. Just like any business on planet Earth. Every business on the planet, has time periods where they may lose money. But they work and strive to be in a place, where the “odds” are in their favor.
Within this entry, it may be helpful to refer to this previous entry of ours, that touches on these ideas.
However, in this specific entry, we discuss our thoughts to those direct questions …
(Video Included. If you’re seeing this entry elsewhere and cannot play the video? Click this link to go to the exact video entry …)