6 Dead Simple Ways to Benefit From Market Corrections

Sep 23, 2023

Hi everyone,

I hope you are having a great Friday!

In this post I’ll cover 6 easy ways you can take advantage of market corrections

Here’s what we will cover:

Stay in Tune with the Market
Do Post Analysis
Study Past Winners
Revamp your Trading Rules
Read Trading Books
Take Time off

Before we get into it, Rai and I will be hosting the 4th Ultimate Trading Guide Webinar this Saturday at 12pm EST. This will be a great way to improve your trading during this correction.

We will be focusing on risk management and sell rules. Click the button below to register and join live.

Now let’s dive into today’s article

Stay in Tune with the Market

Even when the market is correcting you don’t want to take your eye completely off the ball.

Continue to complete your daily routines to make sure you are keeping in touch with the market health and any developing themes.

This can be as simple as running through your screens at the end of the day and noting any stocks or groups that are standing out in terms of strength.

I would also recommend analyzing the groups, sectors, and indexes to monitor for constructive action, reversals off key levels, levels of extension….

Of course if you are focused on the short side you should be as dedicated to your trading routines as usual.

Do Post Analysis

With the markets working out their excesses it’s the perfect time to dive into your trades and calculate your key statistics.

Knowing your batting average as well as average win and average loss can help you recognize what areas of trading you need to work on.

In addition, analyze your entries and exits on your recent trades as well as your top trades and biggest losing trades.

For any large losses, take the time to note the reason for it, and how you can prevent it in the future.

Look for common things you are doing well and common things you are doing poorly.

Remember as you are analyzing your past trades that even if a trade ended up as a loss, if you handled it well that is still a good trade.

Study Past Winners

It’s also helpful to go through previous big winners and to simulate trading them. Be intellectually honest about where you would enter and exit.

Also thing about how you would find the stock in your routines if it was a leader today.

Here is a list of stocks to study:

EBAY 1998 PLTR 2020 CRSR 2020 CRWD 2019 TSLA 2010 TLRY 2018 INMD 2019 ZIM 2021 NOW 2012 ROKU 2017 TWLO 2016 BROS 2021 UPST 2021 U 2020 ACIA 2016 TASK 2021 SWAV 2019 SOFI 2020 PUBM 2021 PGNY 2019 MNDY 2021 LSPD 2020 TWLO, 2018 ZM 2020 SHOP 2017 PTON 2020 DOCU 2019 Netflix 2003 SE 2019 CRSP 2018 FVRR 2020 Etsy 2017 NIO 2020 TSLA 2013 CYBR 2018 CROX 2007 PINS 2020 FSLY 2020 CRWD 2020 PYPL 2017 SQ 2016 GOOGL 2004 FTNT 2020 FTCH 2020 CF 2006 TWST 2020 SNAP 2020 ASAN 2021 UPST 2021 NVCR 2017 ULTA 2009 CMG 2018 TEAM 2017 CHGG 2017 MTCH 2016 AYX 2018 ASO 2020 ZTS 2014 ETSY 2017 ANET 2016 CVNA 2018 AMBA 2012 MDB 2018 OLLI 2016 PAYC 2014 WING 2017 MEDP 2017 BILI 2020 PANW 2014 SWAV 2020 ISRG 2004 GOOS 2017 OKTA 2018 NET 2020 INMD 2020 FOUR 2020 FANG 2013 EA 1991 COST 1988 FIVN 2015 VEEV 2016 AXON 2003 BABA 2016 RACE 2016 LULU 2009 BIDU 2007 QCOM 1993 SEDG 2017 CSCO 1990 NVDA 1999

Revamp your Trading Rules

Market corrections are also an excellent time to revisit your trading rules and make any updates.

And if you don’t have trading rules and you are reading this. It’s my opinion that you should not make another trade until you do.

Put in the work and define your system so that another trader could follow it.

Read Trading Books

It’s also a great time to read or re-read high quality trading books.

With new experience from market cycles, you’ll understand more of the nuances from books that you’ve read even multiple times already.

Here is my recommended list:

How to Make Money in Stocks - O'Neil
How I Made 2 Million Dollars - Darvas
Secrets for profiting in bull and bear markets - Weinstein
How to Trade in Stocks - Jesse Livermore

Full List: https://tradingengineered.substack.com/p/the-best-trading-books-for-new-traders

Take Time off

This is also important. It’s great to work on your trading system, but be sure to take some time away.

Recharge your batteries so that you are mentally ready for the next uptrend and feel refreshed.

Get outside, spend time will family and friends, do your favorite hobbies. Life is about a whole lot more than trading.

I hope you found this quick article helpful!

If you did, it would mean a lot to me if you would leave a like and also comment below your favorite thing to do during market corrections.

This post was brought to you by Deepvue Charts. My Daily Driver for Charting, Alerts, Watchlist Management, and more!