Hey Guys,
The market is down big this morning and almost all my positions are down. I sold two tickers this morning that reached the time limit, both for a loss. Also I had picked up an MES futures position at the open of the futures market yesterday, and it already hit its stoploss this morning.
I bought another full slate of positions this morning. I picked up SPXL and PYPL shares as well as HD options. I also bought a bunch of other options in my extra options account.
I'm just following the back-tested trading strategy. You may recall that I loaded up on positions late last week too. Sometimes the market rebounds after the initial "dip". Sometimes the market rebounds after a deeper dip. And sometimes there is no rebound in sight. Over time the market has always gone up, but in the short term there is no way to know for sure where the market is going next. That's why I love following a back-tested plan. It takes the guesswork out of my trading and ensures that I'm taking an approach that has been tested across decades of market conditions.
If you've been a subscriber with me for a while, then you know this year has been filled with these volatility splashes. When they come around, there is often a sense of "doom" in the air. And as you probably know, I just keep taking the trades that set up regardless. Every single time the market has had a volatility patch this year, it ended up with the market eventually setting new highs. A lot of times those new market highs correspond with me reaching new profit highs.
So up until now it has ultimately paid off to keep taking the trades, even during volatility and even despite the losses I took in the midst of the volatility. Will that continue to be the case? I have no idea. I can't predict where the market is going. That's the risk that I'm taking by making these trades. I'm using history to inform my trading decisions, but it doesn't mean I can predict the future.
So my plan is to stick to the trading strategy like glue. When I run a back test, it's a simulation of the trading strategy being run with "no emotion". I want to honor the back test, so I'll keep making the trades regardless of how the state of the market "feels" in any given moment.
Keep in mind that you don't have to do what I do. You can do whatever you want! Whether you follow my approach or not, I fully support you. I'll continue to communicate what I'm doing like always, but ultimately it's up to you what you do in your own trading account.
If you have any questions or feedback, I'd love to hear from you.