Flip flops, thongs or whatever...

Wednesday 24th July - Daily Equity Update

The index is flip-flopping.

I just hit delete on 6 charts a load of terrible writing. It was in-depth and would probably attract subscribers because it had shiny charts. This would create questions and therefore “clicks” and “engagement”.

It was waffle. Helpful waffle if you are trying to create your own system replicating this one. No one has reached out and said that is what they are doing.

Let’s get to the point about trying to make better decisions in the market.

The SP500 might go down.

We have 40 longs in the portfolio.

If all the longs trigger a stop loss today our portfolio will close +19.4% since we started this journey.

The only thing I will “lose” is what is represented by the yellow line, open equity.

4.54% of current gains on open positions.

They don’t belong to me!

They still belong to the market.

19.01% belongs to me because those are the gains that we have closed from all our trades up to today. I am highly protective of that because it belongs to me and not the market.

If leading up to today I had been “too protective” of gains that belonged to the market it would have stopped me from holding them for so long. It would have restricted future gains.

There is always a gap risk. We may not be able to transact at our stop levels. Our trade exits may be lower than we think and our losses larger. That is the risk we take to balance when we are long or buy things when many think “it has gone up too far”.

My dominoes are aligned. I have extracted a return which allows me to make decisions from a position of strength and not weakness or panic.

If the YouTube thumbnails are correct we will close positions to cash and wait for the dominoes to realign.

Or…

While the index flip flops some of our 40 longs or others along the way may be the only tickers still going up.

I am a random dude on the internet none of this is trading advice this is me sharing my portfolio and trying to share how I think about things. Do your own research and where possible share it with the group.

Every day is a school day.