Is the crash coming???đđ¨
Look, nobody really knows when a crash or correction or even recession is going to happen. But many are in the business of telling you the year or the decade! Most times they are wrong! đ
And as a trader thatâs no help to you!
Yes, I do research the fundamentals and much of what the so called experts are saying I agree with. I will also  be talking a little more about this in the coming weeks. As a trader and someone who believes in having a clear trading plan, thatâs not mine or my studentâs game and not what we use to trade! We are in the process of timing and here at TSC! We trade strategies we trade set ups (long or short) and nothing happing in the economy changes that. I short, we have a plan to steer our ship regardless of what the sea conditions around us are doing!
The above S&P Futures charts shows it nudging its weekly trend line and weekly 50MA for the first time April this year. From a technical perspective we are watching this level to see if holds and cross correlating this with the levels on the Dow (not shown). If it doesnât hold we have a clear plan of what and when to trade it short. That doesnât mean those trades will work, it simply means we have a clear trading plan that has clear risk managed downside opportunities if, and I repeat if that move happens.
Meanwhile our trading plan keeps producing clear set ups
So, this could be the start of a bigger downside move. The question is if you are holding Index ETFâs or Index tracking mutual funds and the markets do break these current levels and this is the start of something bigger, do you have a clear trading plan??
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Alright⌠Not one of the most exciting subjects we have ever covered, but definitely one of the MOST important.
Risk management is something so many traders âthinkâ they have locked down, but actually what they are doing is taking themselves down a road of no return.
Both for them and their account balance.
And whatâs worseâŚ
There is a group that simply overlooks risk altogether, or takes some one-time advice that is usually completely inappropriate for them and the way they trade!
So how do you make sure you not only know what to do when it comes to risk management, but you ACTUALLY do it?
First OffâŚKnow Your Numbers
Yes, itâs a small bit of maths, but knowing the simple multiples can save your account balance!
Letâs say you are risking 10% of your cash pot per trade.
But that only requires a 5 trade-losing run to be the best part of 50% down overall.
Oh well, I still have half my money.
Hang on!
You now need a 100% return on that balance JUST to get back to where you were 5 short trades ago.
Let that sink in for a secondâŚ
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