You get these kinds of trading days during the course of a trading year, that the price action runs instantaneously against all the price action of late.
Today was just that. SPX was acting like it wanted to break higher by closing over resistance and 2100, but with SPX well off the lows of the day, but still down a good bit overall, it doesn’t help when price action runs the stop-losses of the bulls early on. I had one stock get taken out – it was Morgan Stanley (MS) at $26.57/share. It is always irritating to have that happen, but the key is how you respond to the day.
You’ll always have stocks that get their stops taken out and you’ll always have losing days. The question, that you have to ask yourself on a day like today is, “Past trades aside, what do I have to do to start making new profits on the day?”
For me, I added UPRO this morning when the market was showing signs of getting exhausted. I also later on added Wynn Resorts (WYNN) when it was showing signs of bouncing off of the base breakout from yesterday. These were two opportunities I was comfortable with getting behind. Had the market acted like it wanted to go lower, then I would have probably shorted 1-2 stocks. But that wasn’t to be had here.
As a result, I’ve just about cut my losses in half on the day, and there is still plenty of trading time left in the day.
You can’t wallow in past trades and past mistakes. You can’t let yourself become frustrated by a stock that has been stopped out. That is always going to be a part of trading.
What you have to do is to tell yourself, “That’s in the past” and then ask yourself, “and what am I going to do next?”
The answer will come to you a lot easier than you think if you are open to the opportunity the market is presenting itself with.
