A hot market can make you feel invincible.
Every chart looks amazing.
You start making trade after trade.
They all come back modestly green. Your account is climbing a little bit every week…
Until it isn’t.
Overnight, the setups that routinely paid have turned into instant stop-outs.
Same strategy from a week ago. But this week it’s nothing but red.
(THIS scanner works in every market)
Sound familiar?
I wish I could say it didn’t…but it’s exactly what’s happening to me right now.
Every setup that looks amazing to me ends up going red and taking my money.
So what am I doing? I’m zooming out, trying to figure out what I’m doing wrong, and ADJUSTING my strategy accordingly.
You need to do the same ANY TIME you go through a prolonged cold streak.
If you don’t adjust when that happens, what should’ve been a small stretch of small losses can turn into an account-ruining disaster…
Look at my trades on Webull Corporation (NASDAQ: BULL)
Three momentum plays right after the IPO last year. All three green.
This July, similar setup on the chart, but a completely different market…
Every single one was red (about $21,000 gone).
But notice that my red numbers are small (my losses are controlled)…
While my green numbers are much larger (I let my winners ride)
Why This Happens To Everybody
The stock market is like a revolving door of hot sectors, setups, charts, etc.
The conditions are always changing. But no one tells you when. And if you don’t adapt faster than the broader market, you’ll lose your money before you even have a chance to adapt.
But 99% of traders make this part harder than it needs to be. They decide their strategy, pattern, or setup is completely dead and start hopping to a new one (that they have no experience trading).
Now you’re trading an unfamiliar setup with money you can’t afford to lose, in the exact market that just beat you.
Don’t strategy hop. Change how you approach the trade itself.
4 Adjustments That Could Save Your Trading Career
Four adjustments can keep your account alive when your setups aren’t paying like they used to.
- Cut your size in half. Don’t change your entire approach to trading. When the market isn’t cooperating, the danger is the big loss. Cut your size and stay in the game.
- Keep the stop exactly where you said it would be. A cold streak is not the time to give a trade extra room. That’s how a $300 loss becomes a $3,000 loss.
- Decide your size before the week starts. Never while a position is open. Sunday, on paper, with nothing at risk.
- Don’t go to cash. Sitting out means you won’t be positioned when the environment flips back, and you won’t have the reps to notice that it did. Take the same setups. Just take them small.
Then reverse it on the way up. When the numbers come back, add size slowly, over weeks, not in one morning.
More than 4,000 losing trades sit behind me. In a normal year I win a little better than half of what I take, so a bad run doesn’t frighten me on its own.
What I never do is try to work out mid-stretch whether this one is noise or a regime change. That question has no answer in real time.
Next time your best setup quits on you, don’t go looking for a new one.
Cut your size and keep trading the one you know.
Stay sharp,
Jack Kellogg
*Past performance does not indicate future results
