It’s been a bit rough in our trading over the past few weeks. We are still up 313% for the month of July in our SPX Daily Outlook, but we’ve had two down weeks in a row. When this happens, many traders get very concerned and want to start changing their approach to trading. When we go through periods like this we start getting many questions from our subscribers about what we will do differently, and what is wrong with our approach. But there is nothing wrong with our approach, we don’t change anything because of a few flat or down weeks. Drawdowns happen, every trade is a risk and sometimes things don’t go as we expect. While it is unusual for us to have 2 losing weeks in a row, it does happen. It is helpful to remember, so far for 2017 we’ve only had 5 losing weeks in 7 months! So, putting things into perspective helps keep us consistent and remember this has been a great year for us. A few rough days doesn’t mean our approach is invalid and it is time to start over. It is all a part of trading. We stay consistent in approach and weather the storms. This is how we achieve our averages of over 1,000% per month. Some months are less, some are more but staying consistent is the key.

This is why it is so key to trade a lot size that allows you to handle the storms of trading. A trader should be able to handle 5 or more down days in a row without effecting your lot size. Money management is key to handling rough patches in trading. If you are trading too large of lot size for your account size, these types of rough trading days can wipe you out. Be sure you aren’t trading more than you can handle to lose comfortably. Many traders seek to trade as large amount as possible, but that really isn’t the best approach. Consider how much you can afford to lose without causing you great concern and trade that amount. Because losses do occur, drawdowns happen and the unexpected downturns come. The key to trading is to have a solid approach and still be trading when things start going our way again.

We had a rough patch in October of 2016, in February of 2017 and now in July. This is simply part of trading. There is nothing unusual about going through periods of drawdowns. So, don’t despair and don’t throw in the towel. Storms come in trading and to be successful you must weather those storms and still be standing when it passes. Just realize this is part of trading, stay consistent and you’ll be there when things turn. We look forward to a great week and new month of trading ahead of us.