March 09, 2019
Dear Traders,
This was a pretty brutal week straight from the get-go. The market has pulled back quite a bit and the overall sentiment is changing pretty quick. My week started out with our BAC swing. I was able to sell off BAC for 10% profit on Monday morning.
I then decided to get into DAL and BAC long day trades. It was terrible timing but less than half an hour after we entered in the trades news came out that the trade talks weren’t going as successful as they should. BAC was nearing a critical support point of the channel I had been trading so I wanted to wait and see what happened. Unfortunately, this channel broke and I ended up eating a 31% loss.
While BAC was disappointing I think I’m more upset with DAL. DAL was on my watchlist and when I entered Monday morning my intention was to hold this throughout the week as it was at a nice support level. However, this immediately broke as the market slid and I took a 22% loss on it. Hindsight this was a terrible idea as this option ended up running + 400%.
Here's our chart of DAL in our watchlist:
After the run-up:
Trades like these can be very frustrating because when we’re down 20% and the market is sliding we have to make a rational decision. More times than not the price will not recover unless a catalyst happens. So I took the safe route out.
The biggest loss of the week though came with AIG. This was trading in a very nice channel and we bought at the support for a swing play. We actually closed green, however, the next morning SPY dumped down quite a bit and we were down 50% from the get go. However, the price did trend back up to our entry and we could have exited for break even. I saw this as a good sign and I ended up holding onto this for one more night. Of course, Friday the market gapped down again and we were back to being down 70%. We ended up selling this for a 55% loss. A tragedy….The lesson learned here is sometimes its better to let go of the trades.
This week wasn’t all bad though. We had some nice winners and while they didn’t take us green for the week it did help us recoup from the BAC/DAL/AIG losses we experienced. Here are the big winners for the week:
The goal for this upcoming week will be to eliminate these big losses. It’s the most challenging part about trading. The key is to have a price in mind and if it breaks - we cut no matter what. More often than not though we’ll see members hold on to these plays after we sell and it comes back with profit. However, if we are strict with our exits and cut at no more than 20% then overall in the week we’ll more than likely be profiting versus playing the chop.
I look forward to this upcoming week. I think we’re going to see the bears come out in full force. Be careful of the calls and unless its a defensive stock like KO or PG it might be wise to play puts on the swing.
Good Luck and Happy Trading!
