Fear of a new strain returned on Tuesday morning, and Powell’s comments about a possible acceleration in the completion of the government bond purchase program added fuel to the fire. By the end of the day, the S&P 500 fell 1.9% and fell to Friday’s lows.

S&P 500 Index daily

While Monday’s jump looked promising, it often happens that these things fail before finally finding their place. For anyone who has tested the market buying Monday’s bounce, the clear signal to leave the ship was the drop in morning lows around 4620.

Any recoil stings a little, but as they say, the first loss is the best loss. And that was clearly the case here when the index dropped another 50 pips from the sell signal before the close.

Nobody likes to lose money, but if a person jumped aboard the rebound early on Monday and started from a partial position, the actual losses would be quite modest if disciplined and gains around 4620. Given the potential benefit of returning to the highs, the risk-reward was definitely biased in favor of the buyer at failure, even if that particular trade did not work.

But now that experienced traders have left the market, it’s time to start looking for the next bounce. Experienced traders know that a bounce is coming and do not want to miss it.

We need to look back a few weeks to see when was the last time this strategy paid huge dividends. Although there were several quick reversals around the October lows, as long as the trader stuck to them, they were rewarded with a good rally of almost 400 pips when the move finally took hold.

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Waiver on Monday didn’t work. And the next one probably won’t work either. But as long as we start small, enter early, hold the closest stop and only add to the running trade, we minimize losses by ensuring that we are in the right place at the right time for the next big move.

Tesla (NASDAQ: TSLA) continues to grow its harvest following its November withdrawal of $ 1,000 support. Despite all the buzz in the broader market, the TSLA rebound is alive and well. This amount remains in excess of $ 1,000 regardless of what Elon tweets or does with his personal shares.

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