Hey Guys,
Well we've got two scoops of market volatility for breakfast this morning. The market is bouncing all over the place right now.
My NUE position hit its stoploss today. WPM hit its expiration today, but it actually gapped down below my stoploss price to some degree. And in general, my portfolio is down noticeably from where it was just yesterday. My extra options portfolio is almost all red.
At one point yesterday, my account balance was near its high for the year. As of right now, it's around 5% down from that high.
Even though it's volatile, my approach is always to stick to the plan. Here's how I see it. With these back tests, most of us have seen from a bird's eye view that the potential long term reward is quite promising. But the reality is that when you get down to the day-to-day activity, it can be hard to live through. There are days like today where almost everything is red, and for many people that brings up tough emotions. What I like to remember is that if I want to benefit from the long term potential of this trading approach, then I must be able to live through days like today. The back tests simulated taking the trades every time they set up, so that's what I plan to do too. And to do that, I will have to pass through the "drawdown gate" repeatedly over the years to come. There's just no way around it.
So for me, it's a matter of learning to live with days like today. Learning to be ok with the short term ebb and flow of my account balance. It might be the hardest part about realizing the long term benefits of this trading strategy because there is risk involved.
I bought a couple stocks today: PLD and SYF. I also picked up an option for WMB.