Major averages finished mixed near the top of their respective trading ranges on lower volume. In remains to be seen whether Thursday's mini-correction worsens or whether markets have already found a shallow floor. 2017 has been the year of the shallowest floors with QE at full mast and Trump's economically favorable policies waiting to pass. It is important to maintain a fluid, open approach to the markets which could provide favorable entry points, long or short, as we have seen numerous times this year. This has been a market of small baby-stepped gains in the indexes that can be reversed in a day so always have stops in place.
Risk management is the most important rule when it comes to investing. If your average reward:risk is 3:1, you can lose 3 times for every win to breakeven. Our Wyckoff undercut & rally entry points discussed here keep risk to a minimum, typically less than 2%. Meanwhile, the gains in leading stocks of which our Focus List is mostly comprised (as opposed to our Voodoo List which focuses on very low risk entry points) are typically high single to low double digit percentages as stocks often slingshot back after a brief period of market weakness, thus the average reward:risk can far surpass 3:1 using this buying strategy. Further, using any of our buying strategies as shown in our reports section can yield a couple strong wins in the stocks where you're able to sit in the position for a number of weeks or longer. Such recent examples include SQ, BZUN, BABA, and/or AAOI and can make all the difference to your account.
Futures are up despite tensions with North Korea who launched another intercontinental ballistic missile (ICBM) on Friday, marking its 11th ballistic missile test this year. Japan's Prime Minister Shinzo Abe and U.S. President Donald Trump held a phone conversation and agreed to take additional action against North Korea following Friday's missile launch.
Market Lab Report - Premarket Pulse - Risk Management 7/31/17
|Published:||31 Jul 2017 09:16 ET|
Like what you read?
Let us help you make sense of these markets by signing up for our free Market Lab Reports:
This information is provided by MoKa Investors, LLC DBA Virtue of Selfish Investing (VoSI) is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. VoSI reports are intended to alert VoSI members to technical developments in certain securities that may or may not be actionable, only, and are not intended as recommendations. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to VoSI, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Virtue of Selfish Investing. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2023 MoKa Investors, LLC DBA Virtue of Selfish Investing. All rights reserved.