Hey Guys,
The market took another gut punch over the last 24 hours. The S&P 500 gapped down again, this time by about 150 points.
That caused three of my stock positions to hit their stop losses this morning (SCCO, BIDU, and CVX). Not only that, but the prices on each gapped down below the stop price, which made the losses bigger. My WPM stock position found a way to hit its profit target this morning despite the storm, which offered a small bit of positivity. But the net effect overall this week was definitely negative for my stocks account.
The same is true for my options account, where each of the trades I closed yesterday were in the losing column. That account is definitely in a drawdown right now.
This might be a good point to zoom out and look at the big picture, because doing that helps me stay grounded. For one, even though it seems like a bad storm in the market, I like to acknowledge that I'm physically safe. I have shelter, I'm alive, I'm physically ok. So no matter how scary things seem in terms of money stuff, the reality is that I am actually physically ok right in this moment.
Another thing to zoom out on is this trading system and its historical performance. We knew all along that there were be periods with drawdowns. So it's helpful to remember that a drawdown is normal and not unexpected. If this feels too heavy in terms of your portfolio, you can consider dialing down your position sizes. For me, I'm sticking to the plan, as always. There is such a deep history of success with this strategy looking back historically through backtests, even accounting for the drawdowns, so my objective is to keep following the trading rules through thick and thin.
I took on more new trades today. In the stocks account, I bought positions for KMI and AIG. In the options account, I bought options for WMB and KMI.
If you have any questions or feedback, I'd love to hear from you.