We're getting a heavy dose of volatility today! This is a major change from the market environment we've seen for the last month or so. Downward price movement is being largely driven by the tech sector, and I have some exposure there.
My prized position in NVDA hit the stoploss the morning. And my once-promising positions in DOCU and OKTA are both way down due to the tech sector situation. On the flip side, WPM hit its profit target this morning and my short MES futures position hit its profit target today.
Another note on NVDA -- that trade looked so good to me, and it turned into a loss. I don't walk away from this trade thinking, "I need to trade that differently next time." Not at all. I would take that trade 100 times out of 100. It was the epitome of a pullback trade. It just didn't work out this time. And that's totally normal. Remember, in back tests, these trades only won 57% of the time. That's enough for a solid edge but it means there are a lot of losers along the way too! I will keep taking these trade setups over and over, knowing that there will certainly be losses on perfect setups just like this one.
I want to mention one more thing. Days like that can evoke emotions. I have a lot of trades that are way down right now. For some people, thoughts might creep in like, "Does this mean a crash is coming?" or "Does this mean I'm going to lose money?" I don't have the answers to those questions. But I can tell you that according to back test data (and according to my own live trades back in March), sometimes the best profit opportunities might come when there is a market pullback. It doesn't mean there is for sure profit coming soon or anything like that. But anyone who lived through the early March market environment knows it was a tough environment with losses, and then it turned into unicorns and rainbows with wins all over the place. You never know what the future holds, and that's why I lean on history and just keep taking the back-tested trades that set up regardless of the news or perceived market sentiment.
I picked up two new positions this morning. And that CTLT was wild. Within 3 minutes of getting in, it almost hit my stoploss. I had a choice this morning between CTLT and DELL, and I picked CTLT to get the industry diversity since it was in healthcare. I got hit the wrong way with the volatility associated with post-earnings trading.
I want to point out that according to Think or Swim, CDAY is reporting earnings tomorrow, and MGA the day after that. I will be holding through both as always (unless the profit or stoploss is hit prior), but if you don't like the thought of enduring the volatility that earnings can bring, you can consider closing your position prior to that.