Question is, ‘What’s the setup?’

2020-11-17

The last few weeks have been “weird” by past trading standards and this week is showing its oddity with a record-setting open followed by today’s downturn.

Simpler’s traders follow any conditions the market presents, and this time of year offers time to reflect on past market performance, regroup, and rework goals and the trading plan.

This process helps navigate the continuing “weirdness.”

Part of this final quarter reflection includes reviewing which weeks and months were a boost to the trading account bottom line and when things faltered.

This helps understand what market setups work the best in your trading plan — where you thrive — and how best to identify and act on similar market conditions going forward.

Consistent journaling of all trades and an updated profit/loss statement are vital to this assessment.

Year-to-date reviews by Simpler’s traders make note that “popular” and profitable stocks earlier in the year aren’t performing the same. What may have been the “belle of the ball” months or weeks ago has fallen out of favor.

The current plan of action is to seek out specific stocks that meet personal trading plans and overlook any others (whether popular or not).

The market is broad so there are tickers that fit most any trading plan. Market changes require adjustments on the part of the trader to find good fits.

Simpler’s traders are less concerned with the “name” on the ticker and more focused on whether a stock presents a potential setup.

We’ll continue to follow sectors showing direction and strength (and corresponding stocks) while using established indicators and internal signals. 

The plan is to reevaluate everything to date and be patient for setups showing momentum and higher probability for profits.

We Saw: All major indexes fall back, ending rally — 

  • News for homebuilders is strong
  • October retail sales expectations fall short
  • Lockdowns looming in many states

We’re Watching: Reevaluating trading plans for year —

  • Where next momentum, direction rises
  • Pouncing on squeezes early, taking gains
  • For conservative setups with high potential