Hey Guys,
Well the Fed made their announcement yesterday, and in turn the market got hammered. The S&P 500 dropped 175 points between the opening bell and the closing bell, which was its biggest one-day drop of the entire year.
That was like a landslide that brought most of my positions down with it. I hit stop losses on stock positions for ZG, CPRT, HD and MGA. Also, a bunch of my option positions went down drastically in value.
As tough as that was, I've seen it before and I'll see it again. Sometimes there are really bad days or weeks in the market, and you can never be sure when they're going to hit. All I can say with confidence is that they will inevitably come around and that they're part of the trading journey.
For me, the thing that's helped me the most with tolerating days like that is knowledge. The research I did make it crystal clear that days like these have happened many times in the past, and are pretty much bound to happen again in the future. Yet the overall backtest results, even accounting for those days, are quite strong.
So when a really bad day like that happens, as it did yesterday, I'm typically not reeling in agony. I already know days like that will happen. There's no reason, in my mind, to get upset at the inevitable. Yes, I want to build wealth, but I understand academically that it's not a straight line to wealth and that there will be drawdowns along the way.
So I'm going to stick to the plan like usual. Some of my best winning streaks have started after big market drops, although there is risk involved as always.
I picked up new positions today. In the stocks account, I bought positions for MKC and VRSN. In the options account, I bought options for DDOG and ETSY.
I have a number of options that reached their time limits today. I'll be closing those near the end of the trading session today unless they reach their profit targets first.
If you have any questions or feedback, I'd love to hear from you.