S&P 500, continued

S&P 500 - Weekly Review -

Well the market is closed for the weekend now, lets review what actually happened this week. The market was just indeed making a correction, albeit a larger one than I anticipated. The market also did indeed breakout of a descending channel.

Had my stop-loss been larger my trade would be over 10 points in profit by now. But I took the decision that I did and was stopped out. Small stop-losses will almost always degrade the performance of any trading strategy, but when trading using large amounts of leverage a stop-loss is always necessary. If one were to let losing trades run and run in the hope that they would turnaround (and they usually do) and grab a small profit whenever it arrived, then most trades (including the one I just lost on) would be winners, but yet they wouldn't survive as a trader doing this as one day it would be inevitable that a bad trade would go so far against them that they would almost certainly be wiped out.

My view on the state of the market is therefore unchanged and I will be looking for another dip to take a long position.

Thanks for reading.

- David.