How Do You Approach The Market As A Trader Over The Next Week Or So?

Benzinga

Derrick Oldensmith is a Senior Trader and Managing Supervisor and VP of Trading and Education for T3 Live.  @t3live on Twitter/X.   Derrick became a pro trader in 2008, and joined T3 Trading Group as an equity trader in 2011. He has been running the company’s New York City trading desk since 2013.  Derrick has developed and mentored over 100 of T3’s entry-level traders, and currently manages a group of more than 70 pro traders. His approach integrates day trading, swing trading, and portfolio management with a unique, top-down perspective to the markets.

Transcript

00:00 So outlook here, I mean, it's such a tricky market, Derek, because we've run so far. So I like I'm

00:05 scared to kind of chase stocks here. But at the same time, I'm kind of scared to short stocks,

00:09 because you know, all the stats you just gave that, you know, we could have continued buying

00:13 in here. So how do you approach it as a trader here, like right now, for the next like week,

00:18 just looking not not ahead, like, you know, the next month or the next year, but just looking

00:22 ahead to the next week? How do you approach it when you know you've run this far, but you know,

00:26 it's a little bit maybe early to start shorting stocks? It's a great question. So one of the

00:32 things that I was pretty sure to the traders that I work with is one of the keys to success in

00:37 trading is knowing when you need to be aggressive, knowing when you need to go pedal to the metal,

00:41 because there's a ton of opportunity out there. And knowing when you need to be a little bit more

00:45 passive and let things reset up. I think right now and for the last two trading sessions, and

00:51 I'm going to say the same thing today in my morning meeting to my team, I think we're right

00:55 now in a less is more scenario. Be patient, let the market reset up, let the setup come to you.

01:00 And then when the setup is there, then we can see, okay, you know, we created a beautiful bull flag

01:04 here over the course of four days, now the setup is there, we can go in for the longs, or we've

01:09 used it and the market's not creating a pivot, and we can try to go long off that pivot, wait for

01:14 the setup to come to you. Don't force it if it's not there. Where we are this morning, where we're

01:18 set to open this morning is an area that I consider to be no man's land. That's what I call it. We're

01:24 in a spot where if you short here, you can get your face ripped off on a short squeeze. I don't

01:29 like the risk reward on the short side. But the long side, we're still a little bit extended from

01:34 the huge move that we had that makes it a not great risk reward on the long side. If you're

01:39 coming in and you're looking to buy SPY right here at 435, where we're basically trading pre-market,

01:46 then we could pull back to 429 and still be healthy and bullish and create a higher low at 429.

01:51 You don't want to be bag holding $6 against you. You may end up being right on the long side,

01:55 but the pain that you're going to have to endure in the meantime just makes this spot right now

02:00 not an ideal spot for new longs or new shorts. So be patient. Cash is a position. I've got longs on

02:07 still, but I've made my book a little bit more neutral over the course of the last week.

02:12 And I'm just waiting for the setup to come in. I'm waiting for that signal.

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