How you can identify the wrong trading environment quickly...
In 2021, my trading service had one of its worst years ever. We had the "right trading environment"... or so we thought… Yet, most of my calls were wrong. In my last email, we talked about how you must understand the broad market to know when to go bigger or smaller. The second reason you might struggle is when the indices are moving in opposite directions. Like when the S&P 500 hit new highs but the Dow, Nasdaq, Russell…hit a sharp pullback. Historically, a non-confirmation of market trends like this makes trading difficult. Breakouts stop working… more sudden reversals… you're holding trades for less time. Does this mean that the market is going to necessarily fall off a cliff? No. But going forward, we have to be extra cautious. So what do you do? Make shorter trades with smaller positions. I go as short as 1-day using options expiring on Friday. I open a trade on Thursday then close it on Friday. Meaning, I'm less at the whims of the market, can lock down 100%+ gains (potentially) and not leave myself exposed to anything crazy. Here's how to trade 1-day options (a free class), | |
All the best, Christian Tharp Technical analyst at Adam Mesh Live | |
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