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Recently in this stock market crash I have been getting this question a lot, and I think it applies not just to this market crash, but to all large market corrections in general.

So, is it better to sell everything in your investment portfolio, or to hold on till the market recovers?

In this video, I share my thought process on how I make my investment decisions for my long-term investment portfolio, and I offer you two important pieces of advice which you can use to strategize your own investment portfolio.

In deciding whether to cash out, you need to determine if you are using an active or passive investing strategy.

If your portfolio strategy is passive investing like dollar-cost averaging, or annual rebalancing of an all-weather portfolio, then whether the market is up or down should not have an impact on your strategy, and there is no reason to change your portfolio strategy and panic sell just because there is a market crash.

If your investing strategy is more active, such as value investing, or asset rotation, and you are good at it, then by all means follow your strategy of rotating your assets into safe haven products like cash or bonds.

The problem that most people face is that they do not have a portfolio strategy in the first place. And if this is the case, then should you hold on to what you have, or sell it in case it goes lower?

In the past 50 years, the market has only corrected 30% or more about 5 times, and only 50% or more about twice. So we need to think about this in terms of a trade-off between upside vs. downside potential.

If the market has already corrected 30%, and you did not manage to liquidate your portfolio earlier, at this very point in time, how much lower can it go? Another 20-30% more?

But if you sell off and it recovers to the previous highs before you can buy back in, the gains you will miss out are 40-50%.

So you need to decide if the downside risks you are avoiding is worth the potential gains that you could miss out on.

Another major consideration is whether you are currently adding to your portfolio (cash inflow), or drawing out from your portfolio (cash outflow). This will determine how aggressive your portfolio strategy is, and I will talk more about it in the video.

Enjoy the video, and remember to “like” and “subscribe”!

Last week, we had an epic week, with stock indices swinging up and down on alternate days, giving swing traders one of the best opportunities to trade.

Yields plunged (which meant bonds spiked), Gold was up, and oil was also bearish.

In this post, I will be giving an update on 2 of my largest positions:

  • Short position on Crude Oil
  • Short position on S&P 500

 

Short position on Crude Oil

For those of you following my last blog post or my Telegram channel, you will know that I have been stacking my short positions in oil for quite a while, and recently with the price war OPEC, Russia and the US are having, prices are on a downward spiral.

Just today, prices plunged 25-30% in one day!

I have taken the chance to cover my positions, and recently initiated a long position at $30, as I feel that it is a bit oversold, and prices are very near the lows back in 2003 and 2016, so maybe negotiations might start again to push prices back up.

 

Short position on S&P 500

For those who have been following closely, you will also know that I have been short on the stock market, using the S&P 500 as a benchmark.

At the first sign of decline, I posted this predictive roadmap, which has turned out be be uncannily accurate.

 

Simply by following this, my students and I have managed to stay one step ahead in the market, and we have been profiting handsomely both from long and short positions.

As I mentioned in my last trading video, you need a solid trading plan if you want to be able to make money from the markets, instead of chasing price movements blindly.

 


This is where we are the moment in the roadmap, and I am still holding my short positions.

Is this a good time to start buying?

In the long run, I am still bullish on stocks, so I will keep looking for good buying opportunities.

The challenge, however, is avoiding large drawdowns.

So I will want to wait for the dust to settle before buying, and not attempt to catch a falling knife.

If you look at the chart below, since the 1970s, there have only been 3 times when the market corrected to 50% or more, so such super crashes are actually pretty rare.

So maybe a 20-25% correction this time might be more likely, I will see when we get there, since I am still short at the moment.

 

 

Overall, the last 2 months have been pretty fantastic, with 39.81% portfolio gains in February, and 25.8% returns so far in March.

These gains large larger than normal, due to market conditions, but it would allow me to chill for the rest of the year. 😄

Remember, it’s not how many shots you make, but how many shot actually hit the target. One good shot is all is needed to make the kill.

 

Going forward, this week the market is looking bearish now, and the level of fear is increasing. This will present us with excellent trading opportunities.

If you would like to avoid missing out on any of such awesome trades (which we deliver on a daily basis), then you should definitely check out our training program & trading signals bundle:
https://synapsetrading.com/the-synapse-program/

See you on the inside!

Last week, we saw the stock market decline for every day of the week, crashing about 15% from all-time highs, making it the sharpest decline in history.

This huge spike in volatility was excellent for short-term traders, and might also be an opportunity for bargain hunters looking to buy stocks cheaper.

I also made a short video talking about the different approaches to tackle the market crash:

The Start of the Decline

The first 2-3 days of decline was sparked after fears of a worldwide contagion of the Covid-19 virus, which saw a gap down on the S&P 500.

I started to post warnings about not trying to pick the bottom or to start buying, because I knew that a larger move was likely to come.

 

How Far Can this Crash Continue?

As the crash continued, I consulted my charts to plot a possible long-term roadmap, which would see a continued decline to about 15-20%, followed by a rebound and period of consolidation.

 

If there is a strong second wave of selling, we could see a larger sell-off to the bottom of the trendline, or the 200-moving average of the weekly chart.

 

At the same time, we also started initiating short positions on Crude Oil and AUD/JPY.

How to Catch a Falling Knife (Successfully)

On Friday, I predicted that there would be a rebound towards the closing, since there was no meaningful pullback after 6 consecutive days of selling, and also traders would likely close their short positions going into the weekend.

So I started accumulating long positions as the market tested new lows, and true enough, there wasn’t much further decline and even had a bullish surge into the closing minutes.

I took the chance to liquidate some of my positions to lock in my profits for the weekend.

 

Overview of Trading Results for Friday

Overall, it was a once-in-a-lifetime exciting chance to trade such volatility, and also a great learning experience for my students as we got to observe and discuss it together in real-time.

My trading portfolio booked a net 39.52% gain, with most of the profits coming from just 3 positions:

  • Short on AUD/JPY
  • Short on Crude Oil
  • Catching the bottom of S&P 500

 

Going forward, next week is going to be an excellent week for bargain hunting, and I have already posted my target portfolio allocation for my students so that we can be on the lookout for buying opportunnities.

If you would like to avoid missing out on any of such awesome trades (which we deliver on a daily basis), then you should definitely check out our training program & trading signals bundle:
https://synapsetrading.com/the-synapse-program/

See you on the inside!

With many momentum-based trading algorithms in the market nowadays, corrections tend to be sharp and vicious, leaving many traders and investors shell-shocked and unprofitable.

As a market participant, what is your strategy when approaching such a market? What is the best way for you to take advantage of this opportunity?

Enjoy the video, and remember to “like” and “subscribe”!

From 2017 to 2019, Tesla was trading between the range of $180 to $400.

All that changed when it broke above $400, then went to $500, then $600, then $700, then $800, then $900, all within the span of a few weeks. Will it hit $1000 next?

In this video, I explain my reasons for buying Tesla stock, how I screwed up the trade, and how you can tackle parabolic charts such as this.

Enjoy the video, and remember to “like” and “subscribe”!