Happy Friday, Evolvers!
Yesterday, the consumer price index report came in cooler than expected, with inflation rising 0.4% in October.
But what really matters is the market reaction … and it was incredible!
The S&P 500 ETF Trust (NYSEARCA: SPY) surged as much as 5% in a broad-based, multi-sector rally.
Tech names that have been dead for months were up double-digits as bulls grabbed the horns and ran with the momentum.
It feels like we’re at an inflection point in this bear market.
As the SPY trades near a crucial level at $390, the question is this…
Will this prove to be the blow-off top of another bear market rally? Or…
Is this incredible market strength a sign that the bottom is in?
Regardless, the volatility provides incredible trading opportunities for those brave enough to scalp these head-spinning moves.
Stay focused on the best setups and be disciplined with your execution. If you can do both, you could potentially make a small fortune in this market.
But for now, it’s time for our Friday Q&A…
“I’ve taken several losses in a row and I’m thinking about giving up … how do you re-motivate yourself during difficult trading periods?”
First of all, don’t give up!
If I had given up during any of the tough periods I’ve experienced in my career, I would’ve missed out on millions of dollars in profits.
If you don’t give up — and you have a long trading career (like I have), it’ll inevitably be littered with brutal losses along the way.
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And as much as you won’t wanna hear this … Sometimes, these losses will occur in a row (like yours have).
When this happens, it’s critical to take a few steps:
- Check yourself. Be self-critical about why you’re losing and change your habits for the better.
- Remind yourself about why you love to trade in the first place — and your goals for the immediate future.
- Step back and look at the big picture — think about the overwhelming positives of being a professional trader.
Don’t be so hard on yourself.
Size down, trade more selectively, and never risk more than you’re willing to lose!
“It bugs me to see traders on social media winning so much. Have you ever felt discouraged watching other traders have more success than you?”
I get it. It stings to see someone who’s put in less time and effort than you achieve greater success.
It made me think I’d never get the results I wanted…
Comparing yourself to others is one of the most dangerous and costly mistakes you can make as a trader.
Not only is it psychologically draining … but it can also completely ruin you.
Short-sighted market participants view trading as a zero-sum game.
They think, ‘If this guy is winning, I must be losing.’ But this is a terrible way to view your path to success.
Bottom line: There’s plenty of action in the stock market for everyone. Just because some other trader is crushing it doesn’t mean you can’t do the same.
Don’t envy other traders — learn from them!
Have a great weekend, Evolvers!
Study hard and rest up. Next week could bring fireworks to the market. Come prepared.
Let’s see if Thursday’s incredible market surge has legs into next week.