1. somehow you manage to be improving an already excellent report with new insights that make it even better
2. if ever there has been a convincing argument to "plan the trade, trade the plan", "follow your signals", "respect your stops" THIS REPORT IS IT!
As an example, I am trading in about 10 stocks atm, last week I held or entered 7 stocks, including 1 that I bought a good size chunk of on Monday. By Wednesday I had been stopped out of 4 of them according to my trading plans, including the 1 that I bought on Monday - all 4 were relatively recent entries and all 4 were stopped for losses. On Tuesday I was wrestling mentally over whether or not to move my stops, particularly that new entry. I chose not to. By Wednesday I was out (of the 4 out of 7), and have taken a total loss that hurt a bit, but which I accepted when I entered them.
On Friday I also felt a bit like that goose when some of those 4 stops bounced back above my stop levels. Today I'm glad I stuck with my plan. I will look for re-entries into each of those 4 stocks (because they all meet my criteria of the kind of company I'm comfortable being in), but my re-entry will be based on new buy signals including what themarket's doing, and a new trading plan with RRR, entry, target, stop, etc.
As for the 3 stocks I'm still in, all longer term plays, well 1 of them is close to its stop and may get hit Monday, maybe not. The other 2 are pretty well ahead of their stops so they're safe. Am I worried about these ones? No, because I am sticking with my plan. Whether this is a long term correction or a short term dip I'm happy with my position.
My point being, as your report suggests, follow your signals, trade to your plan and dont deviate. You will sleep better at night.
The current downleg may be small, it may be more significant, it may rebound quickly, it may not, I dont know. JUST DONT ASSUME. But there is NO NEED TO PANIC - particularly if you are sticking to a sensible trading plan. Whether you're a short term trader or a longer term investor there is an opportunity here. It totally depends on your investment/trading horizon (as you say in your report) as to how you play it, but have a plan and stick to it. If you're a short term trader, assess each potential trade carefully before entering. Dont assume you are buying a bargain and that it will bounce to levels of 1-2 weeks ago within 1-2 weeks. THAT MAY NOT HAPPEN THIS TIME!
For me, I think the market will fall further, beyond Monday. Monday will probably see the XJO fall to around 4500 (it's floating around there on IGMarkets quotes atm). I've got the 10% correction figure in the back of my mind. Why? Because to me this is about a correction of an overinflated market that's got ahead of itself in the present rally. It could be 20% but that would bring us down to around 4000 on the XJO. I just dont think there is anything serious enough fundamentally to warrant a return to that level (particularly the Australian market because its fundamentals are significantly more sound than other o/s markets). After all, if its a correction, then its about returning to a long term trend/range (see the last few slides in my caution presentation at the link in my sig).
If its 10% or thereabouts, then what we are looking at is in the following XJO daily:
We are therefore potentially looking at a level somewhere 4270-4400 if a 10% drop is playing out, given the bullish uptrend support line which may provide the key support (for me, if it breaks that support line, then we're out of the current rally, not before). This is not much worse than the June/July dip in percentage terms.
It may get there, it may not, it may go further. Just be cautious and aware of the potential market movements and trade accordingly - not assuming it will simply rebound quickly and therefore if trading short term, use stops, take small, quick profits, etc. If investing longer term, its a great opportunity for a low price entry without the risk attached earlier this year before the GFC began to clear. Remember now that many companies have been deleveraged and re-capitalised with stronger balance sheets to better withstand any underlying economic challenges we may still face.
I better stop here before I get into waffle territory (probably too late) - there's only one weekend waffle and I wouldnt want to tread on Wink's waffle-turf :-)
(20min delay)