Hey Guys,
The market is in volatility mode right now. Yesterday, the S&P 500 dropped more than 120 points from where it opened, only to then rebound and recover a lot of that by the end of the day. Then this morning, the S&P 500 is down 40 points to start the day.
I had three stock positions that hit their stop losses in that melee yesterday: SPXL, NXPI, and my first AAPL stock position. That wasn't fun. And it added pain to see the market rebound (at least temporarily if nothing else) shortly after the stop losses were hit. That's one of the things that makes trading so hard: there's just no way to be sure what's coming next in the market. That's why I take the approach I currently do: I don't guess or make on-the-fly decisions. I just stick to the plan. And the plan is based on backtest research that spans decades of stock price data and trade outcomes. So although those three trades didn't work out for us, this approach has a lot of support in the research I did. My approach certainly won't generate the perfect outcome on every trade, but no approach will. We're not trying to fool ourselves into thinking we can be perfect on every individual trade. Instead, we're trying to put the odds in our favor over time.
I took on some new trades today. In the stocks account, I bought positions for SMCI and CTSH. In the options account, I bought the options for CTSH.
If you have any questions, just reply directly to this email.
Eric