Week of 17/7/2023 Market Diary, Friday’s selloff nullified the positive factors made by $RSP and $IWM within the earlier two days, doubtlessly leading to unrealized losses for lately added shares. Nevertheless, I consider the timing of the promoting arrived at an opportune second, because it prompted us to reassess our portfolio administration over the weekend and achieve a recent perspective. The upcoming week will function a check of our proficiency in threat management.
Think about this meals for thought: Should you at present maintain shares in your portfolio with positive factors of lower than 10%, a correction of lower than 9% can simply erase these positive factors and produce the place again to breakeven. Now, the query is, 1) Do you’ve got the arrogance to sacrifice a few of these positive factors and maintain on for a possible larger base formation? 2) Does these positions have sufficient technical cushion to resist a possible week of correction earlier than your cease? 3) Or, would it’s possible you’ll favor to additional scale out your massive successful positions to finance this new place, whereas lowering the volatility of your portfolio’s p&l?
Value reminding that If the market doesn’t show the place appropriate, it’s nonetheless doable the market has not confirmed the place improper. Your publicity and threat are a lot larger for those who let the market show you improper as a substitute of your actions eradicating positions systematically until or till the market proves your place appropriate.
Thanks for studying.
PS: Should you benefit from the above curated article, it’s possible you’ll observe me on twitter (@jfsrevg) to get day by day market diary, buying and selling concepts and intermittent reflection on life as a dealer.
Week of 17/7/2023 Market Diary,
Friday’s selloff nullified the positive factors made by $RSP and $IWM within the earlier two days, doubtlessly leading to unrealized losses for lately added shares. Nevertheless, I consider the timing of the promoting arrived at an opportune second, because it… pic.twitter.com/kXUvqeXZXX
— Jeff Solar, CFTe (@jfsrevg) July 16, 2023
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