Bad Trades ‘Fired’ On Friday

2021-02-26

Friday set the tone in this market for traders to clean house or get caught in the whipsaw of volatility.

Any trade not working to boost the bottom line needed to get the proverbial axe.

Consider bad trades like owning a car wash. The owner has 10 workers and eight of those workers are working hard and bringing in profits. But two workers are sitting in a corner surfing the internet and drinking too many caffeinated beverages.

These lagging workers are a drag on profits. The best business decision is to give them the boot.

Treat trades the same way. Any position not working gets fired, especially on a Friday where you don’t want to lose your arse. 

Friday’s session simply put traders on their heels. Traders struggled to find solid positions within the spikes and gaps that didn’t subside until the close.

While the Nasdaq squeaked out a minimal rise, the S&P 500 slipped again, and the Dow took another solid hit to the downside.

Simpler’s traders spent this last Friday in February in clean-out mode while prepping for next week and a fast pace into March. It was a good day for observers —  and for more experienced traders —  to sit on their hands and watch this market movement for future reference.

This week cemented how this is a market where literally anything could happen. Hell, Texas just froze over. (We can say that — we lived through it.)

We’re focusing on shorter time frames, not being too long in setups, and staying flat or in cash to eliminate worrying through the weekend.

We Saw: Topsy-turvy challenges throughout the market — 

  • Traders losing when wrong on longs
  • Week of losses in all three indexes
  • Bouncing bond yields continue investor frenzy

We’re Watching: Being flat, in cash, and happy into the weekend —

  • Bad trades and quickly cutting them
  • Staying on the opposite side of the crowd
  • Keeping positions light, accounts safe