Gaps, Spikes Hitting Bears And Bulls


Simpler Trading Team

Mar 03rd 2021  .  2 min read

Bulls and bears have been at odds as the year rolls on with both sides getting cut off at the knees in a cyclical ebb and flow.

As each side licks the wounds of losses — or celebrates a hard-fought win — how are Simpler’s traders working through these turbulent cycles?

The default strategy is to follow a pre-designed trading plan supported by a proven checklist. This is a system backed by a collective 200+ years of experience.

There are three elemental positions in trading: short, long, or in cash and waiting.

Heavy midweek selling reinforced that checking off “in cash” on a trading checklist is a powerful position for maintaining account stability.

Since the October lows, the market flowed in an overall steady uptrend to the point traders were lulled into complacently. Recent gaps and spikes have upset this feeling of “all is on the rise.”

The market can now be viewed as going through a “normal” correction cycle. For traders, rough patches like this from time to time aren’t a big deal… unless they fail to adapt.

A pre-determined trading plan and proven checklist help traders “stay within their range” of risk management and adapt to expected ups and downs in the market.

With the market cycling like it has this week, Simpler’s traders are cautious, in cash, and not looking to jump into any hasty setups.

They are relying on the fundamentals within their checklist that guide them on which strategy to use during market volatility.

We Saw: Another harsh gap down across the market — 

  • Tech stocks plummet in midweek sell-off
  • Bond yields on the rise, fuel concerns
  • Banking, financials looking stronger

We’re Watching: Cautious with setups, content in cash —

  • How low this market will go
  • Will spring bring a flowering economy, market?
  • Setups that limit risk and avoid hasty moves