Should you let the indices dictate your level of exposure?
The best traders contradict themselves on this constantly — telling you to respect the indices while, at the same time, partially ignoring them.
Here's Gil Morales & Dr. Kacher's take:
In case you didn’t know it yet. This is about the best market you will ever see and it will bail you out of shoddy buying, bad decisions and FOMO…right up until the moment it doesn’t. Bad habits get rewarded and people start to think they’re Jessie Livermore or Warren Buffett.
Process will win it for you long term. Whether you’re a Dividend Growth investor or a Swing Trader it’s ALL about a consistent process.
Updated Leaders from FTD as of 5/22. Best names typically emerge in first 13 weeks. Blue are names at or very close to New Highs......others are grayed out but many are still above 20d.
Always try to sift and get into the strongest leaders
#stocks $qqq $spy #leaders
https://t.co/KXLO2hzLuA
Mistakes I made in 2019. Don’t believe the rally is for real. Hesitate and don’t take the first few names breaking out. Try other names with excessive size to make up for the gains I should have had. Market pulls, get stopped out on some, sell or reduce the others due to pressure . Size even more on the next round of names to make up for what I should have been up in the first and second round of names, rinse repeat. Have a few early leaders start flagging, size in expecting a break out. Stop out, end up trying 3 more times inside the flag. They all stop out, each one I sized with more and more risk.
Hit risk limits for the month at various points in the rally, keep trading with larger size to dig myself out. How can i stop trading when the rally is so strong?
At the end of it, was down around 30%. If I had followed my risk rules, year would have been down less than 10% (I’d have to go back and check to get exact numbers). More importantly there would not have been the spiraling and I could have likely salvaged a profitable albeit disappointing year.
For anyone who has underperformed during this rally. I know, it sucks. I’ve been there. I’ve underperformed many times in rallies where it seemed like money was raining from the heavens and I ended up empty handed. The worst was 2019 where I was heavily long the entire rally and somehow lost 30%. Kept over sizing and losing and was able to dig a huge hole which I wasn’t able to dig out of until the huge rally in 2020.
This rally I’ve underperformed as well.
But guess what! It’s not over yet!
There may be many more opportunities and there will be a lot more rallies too. The market isn’t going anywhere. Reflect on what went wrong, how you can correct your process and go from there.
@CFlanders7 when im trying to get allocated from cash and progressively expose in a drawdown, it always feels like it will take forever to get exposed, and small size wont move the needle
@CFlanders7 the Q is how you managed to go from small size to margin within 2 weeks. seems very abrupt.
also, im curious about the first few days. how do you decide to size up? are you risking closed profits, open profits, or risking more (with risk of drawdown) on the back of pnl momo?
@theparabolic1 @ERISAsil@PradeepBonde ok nice just checking. i also only follow breaking news feeds and have ignored all traders also. its just easy to get lost in the sauce, especially when you have achieved what you have!
@Crowded_Mkt_Rpt whats difficult to square for me is this discussion of infinite abundance, and then on the other hand, we are STILL engaging in conflict over natural resources in 2026.
Great discussion though I prefer to be an optimist!