We had another great week Day Trading SPX weekly Options +479% and +215% Day Trading SPY weekly options. One of the most difficult aspects of trading, is letting your winners run. This is especially true in Day Trading SPX and SPY weekly options. We all fight the struggle between fear of letting a winner turn against us, and knowing when to let it run. If you have traded for even a little time, you know the agony of seeing great profits evaporate in seconds as the market turned fast. And the frustration of taking a profit, only to see the market surge and if you just would have held a bit longer you could have made so much more.
The sad reality is so many traders let those past experiences influence every future decision they make. So many traders exit when they should hold, and hold when they should exit because fear and greed are controlling their decisions. But to be truly successful in trading, to see huge daily gains a trader must learn to conquer both fear and greed. You must learn to trade with discipline, have reasons for when to hold and when to exit. Don’t just exit because you are afraid of it turning, exit because you have an objective reason for exiting the trade. Then don’t worry if it runs further or if you gave up profits. Have a solid reason for choosing your exit point and stay consistent. Accept the reality, you will rarely exit the trade at the maximum profit potential every day. Accept the reality, there will be losing days. But if your strategy is sound, you will make a consistent profit by trading objectively and that is the goal of trading. If you trade consistent with a good strategy, the profits will take care of themselves.
Our SPX Daily Outlook provides traders an incredible tool to help determine when to enter and when to exit. Knowing our key levels and % targets helps a trader know when to let it run and when to exit. This allows traders to make their decisions not based on emotions but based on technical indicators. Ours is a proven strategy and as we stay consistent to our approach, the profits take care of themselves. Friday was a good example of using the key levels to let it run.
We forecast an up day and entered our call at 9:35 as normal. The market exploded fast to the upside. Within only 20 minutes we were up over 100% and it was tempting to lock in the profit and be done. But because 2377 was our 1st key level and it broke through it so fast, we used that level as our support. Our 2nd level was 2383 and a basic rule is that when a key level is broken it should act as support. So we held, and within another 30 minutes it broke through our 2nd level of 2383. Then it bounced around at that level for a while. We were watching it closely anticipating it to continue the run and hit our 3rd level of 2387. We were watching both the 10 and 20 SMA on a 5-minute chart. It touched below it very briefly, but then continued higher.
We held as it briefly broke through 3rd level of 2387. Now some may have chosen to exit as it broke through the 3rd level, but given the overall momentum of the day, we held for a bit longer, wanting to see if it could continue higher. We were using 2385 as a support level (mid way between 2383 and 2387). It is not uncommon to see the SPX struggle to break through a key level, and using about mid way between to 2 levels is often a good way to give it room to move. Especially when we see the 10 and 20 Moving Averages so close together, that normally indicates some consolidation. After it finally broke through 2387 with strength at 2:30 pm that became our support level, and our stop level. When it turned and came back we exited our position for a very nice 381% gain. The key to letting it run was watching our key levels as shared in the SPX Daily Outlook.
It was a great week, and we look forward to another exciting week ahead, day trading SPX and SPY weekly Options.