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Good Morning! Yesterday’s price action, and today’s open, provide a good teachable moment for new and developing traders. Wild days happen. We can take all the precautions we want as far as risk management and position sizing and we’re still going to have days where we wake up with outsized gains or losses. How we manage and adapt to those situations can be a huge indication of how successful a trader we will become. It also shows the difference between the various kinds of trading. Momentum day traders wait months for a day like Thursday, and it is not uncommon for that kind of day to make up a double digit percentage of their profits for the entire year. Whereas most swing traders hate disruptive candles like yesterday’s, when value is hard to come by.
With today being the Friday of a short week, we’re going to let today play out before we seek out any new trade ideas. With the gap down but complete lack of follow through to the short side yesterday, it could be equally likely for the markets to pull the rug out today, or end up near all-time highs yet again. We’ll continue to watch the banks and the travel stocks for value plays, but so much of our ranges and momentum indicators will be skewed after Thursday’s wild ride, so we’ll let the day play out and reassess our plays on Monday. Have a great weekend!