The Winning Strategy
The best market lesson that we can give you is
not something resembling the next “Holy Grail” indicator to follow,
but learning how to manage your risk for those times when a proven edge strategy
doesn’t provide the anticipated results.
12:56:50
Intraday Update
A reversal long entry has formed a 1,2,3 higher
low in the S&P 500 ETF (SPY)
(see attached). The support lows were found around the 50% Fibonacci
retracement from the December lows, with further evidence of support in the form
of prices being “stretched” to the 1.5 Volatility Band. The SPY is
trading down 1.41 at 90.61.
We had some very good reasons in the form of technical background support
with which to establish our position. A high-probability, time-tested pattern
had set up, so we took the trade. And guess what happened next? Well, you know
what they say…”You got to be in it to win it.” That much is true, but
sometimes the individual trade doesn’t produce the anticipated results. So what
do you do when that happens? You execute with the same precision as when
you entered the trade with the tradable edge.
Just as important as taking the trade when the edge presents itself, is
knowing how to convert that statistical edge trade into long-term profits. The
only way to do this is by keeping your losses contained to a small acceptable
amount for those times when the individual trade doesn’t work out. That’s the
“Holy Grail” to long-term trading success.