Hi Guys,
The market had a terrible session last Friday and it ended on a very sour note with my MES futures position getting knocked out. Now today, it's rebounding in a big way to start the day.
In situations like this, I often wish I had more positions open to catch the ride back up. What I've learned from experience is:
1) Just because the market started up this morning up doesn't mean it will stay up. We are right smack in the middle of heavy volatility. There's no way to know where things will be tomorrow or in a week.
2) This happened to me multiple times already this year, where the market thrashes down and hits a bunch of my stoplosses only to reverse course and go up while I'm not carrying as many open positions. In the moment there might be a feeling of missing out on the ride back up, or a feeling that I need to make the money all back as quickly as possible. What I've learned is that there will be more opportunities to make profit in the market. If the market really does stay up from this point forward, then that's typically our prime money-making zone. And if the market comes back down, then we'll be positioned to buy more when it gets down. It can be hard to handle the feeling of "missing the ride back up" in the short term, but over time there are likely to be plenty more opportunities to make profit.
3) I'm following the back tests. And in back tests, these same types of situations have played out before.
4) These market conditions are not typical. If you look back over the last couple decades, this "elevator" market condition we've seen a lot of in 2021 is not the prevalent one. This market environment will not last forever; no market environment does. There's no way to tell when the market will shift and change gears, but I'm going to keep trading the back-tested setups so that when it shifts into something more typical, I'll be there ready to profit from it.
I picked up BAH stock today. There haven't been any other positions that have closed today.