The Daily Market Forecast... drawdowns
Wednesday’s Blog Results: Both suggested levels stopped out. The Team here had a tough couple of days in both strategies. ☹
Today’s Trading Tip: Handling losses.
Losing should not affect you financially or psychologically. You’ve determined how much you can lose before you react emotionally, and you’re disciplined to limit your loss to that number on every trade.
But what if you do get anxious or upset? Here’s a quick checklist you can use when that happens:
- Was the risk amount within your tolerance?
- Did you follow the entry rules precisely?
- If you’re in a losing streak, has the drawdown happened before?
- Was the prior drawdown equal or less?
- Are you feeling confident in your strategy edge?
Stop when your answer is “no” and fix the problem. That may be easier said than done but until you do moving on through the checklist is ineffective.
If you get to the end and you’ve lost confidence in your strategy it’s time to move on. Start exploring new strategies. Conversely, if you’re still confident then lower your position size (risk) until your strategy comes out of the drawdown.
Today’s Best S&P Futures Turning Points:
Short Level: Blue skies above. If price trades below 4710.25 consider shorting the retracement back there, stop 4716.00 (5.25 risk).
Long Level: Buy 4715.25 stop 4710.00 (5.25 risk).
Trade Well,
Mike Siewruk
P.S. Join us every Saturday morning @ 10:00 ET for our weekly LookBack (5) trade review session. Every trade for the week is analyzed. Now open to the public. Meet the team. Ask questions. Register here for the December 18th session.