Hey Guys,
The market took a big dip since my last email. The S&P 500 is down more than 100 points since the time I emailed yesterday.
And it brought a lot of my positions down with it. In particular, it dragged down most of the option positions I had that were closing at the end of the day yesterday, including the options for TGT and SHOP.
The losses were tough, but what makes them maybe tougher is that some of those positions were green just the day before. Some people might think, "I should have closed it while it was green." But none of us knows with certainty what will happen next in the market, so if you had cut them before they hit the profit target, you might have been cutting off a potential winner before it had a chance to make its move.
That's what I like about my approach: I don't have to play guessing games. I just stick to the plan. And the plan is backed by research and statistics. Will there be losing trades if I stick to the plan? Yes, and there's no secret about that. But it's not like losses would be avoided if I were playing guessing games instead. And this way, my decisions are have academic justification rather than being based on in-the-moment emotion.
I took on one new trade today. I bought shares of SPY in the stocks account, which is a ticker that corresponds to the S&P 500. I always get excited when SPY itself sets up for my trading strategy.
If you have any questions, just reply directly to this email.
Eric