As I’ve said for several weeks now, we’re oversold, yet with more room to the downside. We’ll get some more cat bounces for sure, but there simply has not been the necessary capitulation (and resulting rebuild) yet. I also said that this time we are very unlikely to get that V-shaped bounce that occurred in 2020. This recovery will be slower and in many ways easier to recognize and trade when it comes. In the meantime, we’ll have to pick off the cleaner setups when they arise, and make our overriding priority capital preservation. Talking of which, one of our more recent members has reported extraordinary savings (literally 7-figures) simply by applying our processes, which he previously was not aware of. Of course in some cases there will be simple options strategies to take
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Understanding the overall market condition when trading is one of the most important aspects of trading. Many traders fall into the trap of not knowing when to scale back their trades.
So how do you determine when is the right time to scale back your trades?