How to Protect Your Account From a Stock Market Pull Back or Stock Market Crash $SPY $QQQ
Well Everyone, there ya go. I have been warning you for a while that the market has been on a very risky stance due to numerous reason ( read all recent blog posts). I exited all of my long positions and scaled out in the beginning of July. For all the pundits there will be probably a dead-cat bounce tomorrow and/or Monday. If the market does not overcome the recent damage we can be heading much lower. Yesterday was the first day of some fear as exhibited by the VIX ( The VIX blasted past its ceiling at 13.2 and reached a new multi-month high of 17.11).
There will be many that attempt to buy the dip. Come on, it always works ( until it doesn’t). My suggestion in order to
Protect Your Account From a Stock Market Pull Back or Stock Market Crash
Is have a complete plan. Look at distribution days which now are at 6 on the SPY. Use simple moving averages that signify strength and weakness as well as a time tested Marty Zweig indicator called the 4% rule. Using these methods you can Protect Your Account From a Stock Market Pull Back or Stock Market Crash. There will be losses however they should be small when using a plan. If you sell out when the market is down 4% you avoid a 20% or 50% loss. I suggest using overlapping indicators due to the fact you will mitigate to some degree whipsaws and draw downs. Bare in mind, there is nothing perfect. Yes you will have losses and probably many, however the goal is to avoid the BIG draw downs we saw in 2008, 2002 and so many other periods.
If you would like to learn more, I offer one on one private hourly mentoring. Email me Andrew@Trendfollowingmentor.com
Past performance is not indicative of future performance. Trading is risky.