Stopped Out Wednesday, It Ran 18% Thursday

You watched this happen 3 days ago.

Semis had handed back 18% for July. Wednesday the selling crested and a lot of people were finished. Some sold. Some got taken out by a stop they set weeks earlier and forgot about.

Thursday the Nasdaq closed up 2.8% and broke a 6-day losing streak. Micron ran 18% in one session. AMD added 13%.

Same companies, thesis, just one day apart.

If you've traded more than a year you've been on the wrong side of a Wednesday like that, and the money is the smaller part of the damage. What it really does is teach you that being right doesn't pay. So the next time the setup shows up you size down, or you skip it, or you take it and bail on the first red candle.

That lesson is wrong. And it didn't come from the market. It came from a position that was built so a normal week could end you.

In 15 years at the brokerage I read the same autopsy over and over. Direction was fine. The trader ran out of time, money, or nerve before the move arrived. Duration over direction.

Whether you can sit through a Wednesday gets decided before you enter, by 2 numbers you either wrote down or you didn't.

August has 21 trading days in it. The next Wednesday like that one is already sitting somewhere in there.

Get the 2 numbers, and the 3 checks around them

To your success,
Don Kaufman