First to get the negative characteristics of SPY out of the way.
- SPY is a meat grinder. It rotates and doesn’t advertise the same way a strong or weak stock will.
It is a day trading vehicle for supplementing returns in a small way.
- Risk in SPY should be less than risk in a stock given equal conviction in the setup.
-Stock setups are usually built on higher timeframes and tend to work in my favor more often for more return/risk than a SPY trade
- Stick to waiting for those opportunities where strong charts are breaking out/backtesting important levels and the broad market is in sync.
- The bulk of the money is made in the middle of the move. Much of your profits you will not see, but what you gain from not taking on risk in no man’s land spots is very real. The context of this statement is thinking about the broad market and not being caught with too much long risk when things are extended.
I am mad at myself today for risking more than the usual for a SPY trade. A loser will hunt for the next idea immediately, the next trade immediately, the next fix immediately in order to cure what ails them, only to find more loss.
The opposite action to take that energy and use it to learn from any mistakes made and improve on the process. To be patient for the next opportunity. They always eventually show up. The winner is mentally fit, mentally prepared, and confident in their ability to execute well when it’s time.