The Presidential Debate
This week we had the much anticipated (and maybe dreaded) first presidential debate of 2020. Now, I didn’t personally watch it live, but from what I’ve seen and heard… it was a bit of a mess.
This left overnight traders feeling a little uneasy…
If we take a look at the overnight session, nearly immediately after the debate ended the futures sold off. Why? Incredible looming uncertainty that came out of the debate. And as you know, markets HATE uncertainty.
But after a good night’s sleep, the markets headed higher lead by tech. So the Presidential Debate 2020 Reaction was pretty much a “non reaction.”
Markets rallied all morning… until the stimulus deal fell through. After news hit that Pelosi and Mnuchin had not come to an agreement on the next stimulus package, markets began rapidly sliding into the close.
So in these wild types of conditions, how should a trader approach the market right now?
For me, I try and keep it simple and trade what I SEE, not what I think. Right now, I’m trading two core strategies:
– The PowerX Strategy
– The Wheel
As you’ll see, as a full time trader you need to be able to pivot when the market does… because there are times where certain strategies just won’t work. So that’s why I think it’s so important to have multiple strategies ready to deploy when market conditions change.
First, let’s discuss The PowerX Strategy.
– The PowerX Strategy is what is referred to as a “trend following” strategy. Which simply means, it’s intended to be traded on stocks that are, or tend, to trend 😉
– Due to the fact that markets overall have been a little volatile and choppy, I’m being overly picky and only taking what I would consider A+ trades.
So today when I ran the PowerX Optimizer, there were 7 potential candidates. Of these seven, I have some basic criteria they must meet:
1) No gaps on the chart
2) Nice trends – upside and downside
3) Nice P/L Chart
So reviewing all seven stocks from today using my filtering criteria, it reduced the seven down to 2. Of the 2, I happen to already be in one of the stocks, LL, leaving just EAT.
So today, I bought the $42 strike Put Option in EAT to take advantage of a move to the downside.
Next, we’ll discuss The Wheel Strategy
– Great for sideways to slightly up or choppy markets
– Trading for income
Looking at my open positions, most trades are behaving nicely, with a few troublemakers in TQQQ & TRGP. TQQQ is actually recovering nicely and it’s looking like we should be able to close out the call we sold on TRGP at 90% profit in the next day or two.
So even in crazy markets like these, its important to stick to your trading plan. And if anything just do what I’m doing and be more strict on what trades you take.
If you’re new to trading, I would suggest you check out these two trainings on:
My Daily Trading Routine – How I Swing Trade Stocks & Options