🐺When to Hit the Gas or the Brakes?!

Hey there! My name is Jordan and I write about trading for the WOLF Financial newsletter. If you are looking for more trading tips and tricks, I guarantee you’ll enjoy my content on 𝕏, @AcetheKidTA. 

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What a week of downside with $SPY losing 4.14%.

There was a ton of momentum in one direction this week where it would have been easy to let positions ride without worrying.

Timing this is the difficult part.

Knowing when to step on that gas pedal and knowing when to hit the brakes.

In this case, this week was one for hammering the gas pedal to the downside.

How could you have known?

Price Action

First off, there is no way to know for certain if anything will happen.

But you can be more confident with your positions and thesis.

For me, it’s one thing and one thing only.

Price action.

Most will argue volume or divergence etc.

Volume can be important, but also misleading whereas price action never lies.

IMO, you can very clearly see strong price action versus weak price action sheerly from looking at the candlesticks and their behavior.

Look at Friday’s price action.

Lower highs and lower lows all day and every single pop was getting shorted all day.

This makes it much easier to sit in puts until you see the market break this structure and start making higher lows and higher highs.

On the flip side, if you wake up to a market that is ranging between its premarket high and low and can’t break/break down then you know to be taking profits quicker until you see the market structure change.

Price action never lies, that’s why I always follow it.

I hope

Thanks for reading and have a great week!

-Jordan

@AcetheKidTA