Hey Guys,
The market is up again from where it was when I emailed on Friday. We still haven't had a close below that 3850 mark for the S&P 500, which means we're still fending off bear market territory.
I haven't picked up any new trades yet today. In the middle of the trading session on Friday, WDC from the watch list triggered so I added that (both the stock and the option). Today there isn't much on the watch list for the main account. For the low-priced account, I have my eye on SIMO (I'll enter at 88.51 if it gets there).
In the low-priced account I closed my position on ALSN this morning since it reached its time limit. This one squeezed out a profit that was barely above breakeven. That stock took us on quite a roller coaster ride. Three days into holding the position, it was close to hitting the profit target. Then just two days later, it was all the way down near the stoploss. After all that, it ended up right back where it started.
It can be tough to see a position get so close to a profit and not reach it. Keep in mind that you can of course manage the trade in whatever way you want, and if you want to lock in a profit before a position reaches its profit target, you are absolutely welcome to do so and I fully support you. The reasons I like to stick to my trading plan are:
1) It's back-tested.
2) Using discretion when making trades can strengthen the emotional charges associated with trading, which in turn can make it harder to trade profitably. Speaking for myself, when I use discretion and don't get optimal results, I sometimes feel frustration and like I could have done better. But if I'm following a pre-defined plan that has back-tested results, then it is much easier for me to tolerate a loss because I know I'm in lockstep with an approach that has decades of supporting evidence.
That all said, this trading approach might have raw edge according to back tests, which means you can tweak some of the variables for entry and exit and still potentially fall within the zone of the back-tested edge.
If you have any questions or feedback, I'd love to hear from you.