It’s been a bit rough in our trading over the past few weeks. We’ve had two down weeks in a row. When this happens, many traders get concerned and want to start changing their approach to trading. But we don’t get concerned and we aren’t about to change our approach to trading. Because there is nothing wrong with our approach. We do not change anything because of a few down weeks. Drawdowns happen, every trade is a risk and sometimes things do not go as we expect. While it is unusual for us to have 2 losing weeks in a row, it does happen.  A few rough days does not mean our approach is invalid and it is time to start over. It is all a part of trading. We stay consistent in our approach and weather the storms. This is how we achieve our success. Some weeks are winners, some are not but staying consistent is the key.

This is why it is so vital to trade a lot size that allows you to handle the storms of trading. A trader should be able to handle 3 or more down weeks in a row without effecting your lot size. Money management is key to handling rough patches in trading. If you are trading too large of lot size for your account size, these types of rough trading days can wipe you out. Be sure you aren’t trading more than you can handle to lose comfortably. Many traders seek to trade as large amount as possible, but that really is not the best approach. Consider how much you can afford to lose without causing you great concern and trade that amount. Because losses do occur, drawdowns happen, and the unexpected downturns come. The key to trading is to have a solid approach and still be trading when things start going our way again.

We ended this past week with -158% ROI in our SPX weekly option trading, -180% ROI in our SPY weekly option trading, -71% ROI in our SPX Binary Trader and -23% ROM in our SPX Spread Trader. Such weeks are never enjoyable, but they do happen.  We have had similar drawdowns almost every year. But those periods were followed by large gains, and the key was to stay consistent and not trade too large of lot size. Our indicators are still reliable, nothing in our strategy needs to change. This is just a bit of rough patch.

Remember, there is nothing unusual about going through periods of drawdowns. So, don’t despair and don’t throw in the towel. Storms come in trading and to be successful you must weather those storms and still be standing when it passes. Just realize this is part of trading, stay consistent and you’ll be there when things turn. We look forward to a great week of trading ahead of us. Below are our comments for each trading day of this past week.

This content is for members only.