Fire It Up...

Ouch. What a great way to kick off another week. A triple digit loss in the Dow, followed by a nice 25 point loss thus far in the Nasdaq. This is the biggest one day loss we have seen in awhile. I had almost forgotten that the market can do this every now and again.

In short I am frozen like a deer in headlights this morning. No new trades yet, no new exits taken yet either. I have a few things on my radar, but won't touch anything until the end of the day. I will get my weekly watchlist published here by this afternoon, and I am mowing over a few topics to try to lay down this week (Money Management, Trade analysis, maybe some psychology?). Feel free to suggest topics as you feel necessary.

Until then, keep an eye on support, believe in your trades, and follow your rules. I'll be back in a few.




Good morning Jeff and fellow option addicts!

Well I do have a subject; I would love if you touched on it. With all these stocks reporting earnings what do you do when trading breakouts say you get your breakout signal due to earnings would you take it as a solid breakout? How would you trade it and would it affect your decision on taking the trade?

Danny DR

Money Management & Psychology have my vote.

Mark

Also vote for Money managment (position sizing and other rules), Psychology.
Alessandra

Hello to All!,

I do have a possible subject topic, and we may have discussed it recently but here goes.

Dealing with position size: Lets say I am comfortable with $1000 total loss on my call/put position, or 1% of my portfolio. I take a breakout trade on stock XYZ when it breaks previous 52 week support/resistance with larger than average volume (a good entry for my rules). My rules say that I must give the stock room to retrace back down/up to support levels, before bouncing back up/down, If the stock breaks that new support I exit the trade. falling through support (my rules)

More than once I have almost had a %100 loss on my position size, giving the price action room to breath. I understand the investor psychology behind these types of trades, but my question is the following: Do you have or recommend a way to circumvent this type of positon size loss, while still giving the stock room to breath?

Whewww, long one, Thanks, Lejon!

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About me

  • I'm Option Addict
  • From Saratoga Springs, Utah, United States
  • I am a professional trader and an instructor for Investools. I've had relations with the markets for 9 years. Born in Concord, CA, but reside in Saratoga Springs, Utah. Father of THREE, Husband of one.
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