Tackle Today: Understanding drawdowns
August 20, 2020
≈ Do you have conviction in your strategies? ≈
Traders,
We have been talking cash flow strategies this week as market conditions have remained relatively calm as earnings season winds down and the news has failed to spark movement to the up or down sides.
Yesterday, during the Halftime Report, the coaches discussed some of their mindset around trading strategies like Iron Condors and Naked Puts after a period where they lost money. In 2020, for example, the Iron Condor has been a tough trade with the volatile market conditions we have had.
Coach Tyler explained that if the Iron Condor is a part of a larger portfolio design, and not over position sized, he still likes keeping them in his portfolio regardless of the market conditions.
How much conviction do you have to your trading plan? Do you have enough confidence in the techniques you use to keep using them after a period of drawdowns? In every trading strategy there are winners and losers. There are winning weeks and months and losing weeks and months. Understanding how gains and losses should happen, naturally, within a strategy and your account at large can help you gain the confidence to keep moving your trading forward even in the face of adversity.
If you are new to a strategy, or trading in general, paper trading and back testing can dramatically increase your level of understanding of how something is supposed to work. As always, the best approach is to keep you position sizes in check and in line with your portfolio design.
#TeamTackle
Chart of the Day
SLV Naked Put Risk Graph
Coach Tyler built a simulated Naked Put trade on SLV last night in the webinar. Naked puts are a popular technique to use on stocks and ETF’s that a trader wants to or is willing to own shares of.
Video of the day
Special Webinar – How to Trade the Naked Put
Watch last night’s recording where Coach Tyler Craig teaches how to trade the Naked Put.
Traders Lounge 11 AM EST
Join the coaches in this live lounge, ask questions, discuss ideas or just sit back and listen to veteran traders discuss market conditions.
Cashflow Club 8:30 PM EST
Held every Thursday before Friday’s option contract expirations, this show helps you perfect your favorite cashflow strategies.
Halftime Report 12:30 PM EST
The Halftime Report starts at 12:30 EST and covers what news is driving the market, chart analysis from the movers and shakers of the day and fun in a way that only Matt and Tim can deliver.
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