#1 Secret on Staying Calm Through Extreme Swings

February 25, 2022

Dear Trader,

It was a shortened trading week and it packed a punch!

But this is when trading is fun; when you’re on the right side of the market.

And we were able to close the week by adding two more winners to the board.

While it feels good to close the week out on a high note.

Unfortunately, many panicked this week and that creates opportunity.

The key to getting rich in the markets is being able to pounce on that opportunity and milk it.

Now being able to stay calm and identify opportunities is the hard part.

So let me share a secret on how to stay calm during a fast market.

Don’t look at your PnL!

You shouldn’t look at your PnL, except review it once a week.

There’s a reason why we have mechanics such as risk sizing, scaling in and out of positions.

But once we have money deployed in the market, we need to let it work.

And watching your PnL swing up and down will only play on your emotions of fear and greed.

We can go a lot deeper into this subject and if you’d like to have special training, let me know.

But the easiest way to stay calm is to focus on the market and not your PnL.

As I often say, up, down, or sideways — there’s always an opportunity.

Let’s talk about the CBOE Volatility Index (VIX), aka the “fear” index, which closed at 27.

That’s the same reading we had the last two weeks and means that we’re seeing 2x volatility as normal.

We’re in a bear market regime, so expect to see rallies like today sold.

Now let’s talk shop.

Portfolio Update

Here’s a recap of what we did this week.

On Monday:

No action.

On Tuesday:

Sell-to-close PFE Mar. 14, 2022, $49/44 put spread

Buy-to-open the F Mar. 18, 2022, $18 call

On Wednesday:

No action.

On Thursday:

No action.

On Friday:

Sell-to-close F Mar. 18, 2022, $18 call

Right now, we’re holding:

  • MLCO Apr. 14, 2022, $15 call

Trade Journal

This is my journal which is a debrief of every trade closed or expired to analyze what happened, why it happened and how it can be done better — like what the military uses after missions.

PFE Mar. 14, 2022, $49/44 put spread

Outcome: Closed for 110% gain.

Notes: Great trade and executed this perfectly.  

F Mar. 18, 2022, $18 call

Outcome: Closed for a 30% gain.

Notes: We did great with averaging in at lower prices and sold into the pop. 

Have a great weekend and enjoy a fresh spicy margarita - TGIF! 

To your wealth, freedom, and options!

Joshua M. Belanger

Joshua M. Belanger
Joshua Belanger is founder of CounterVest and the editor of Hot Money Trader. He has been providing ordinary investors blockbuster returns since 2008. In 2018, the average return of Hot Money Trader beat the markets by over 15%