11/13/2025 - So often, the views we trade start with conviction and end in staleness. We become anchored to our conviction and thus become less able to pivot when markets change. A great trading process is to look at what you're trading with fresh eyes daily. For instance, I recently transitioned to a small short position in the S&P 500 index market. During the day and especially at the end of each trading day, I study the charts of the component sectors of the index, such as technology (XLK), consumer discretionary (XLY), etc. I also study other equity indexes, such as the Russell 2000 small/midcaps (IWM); the NASDAQ Index (QQQ); the Dow (DIA); etc. I use the Barchart website to identify how many stocks are making fresh one-month highs and lows and three-month highs and lows, and I use the StockCharts site to track the number of stocks producing buy and sell signals across various technical indicators. In short, I want to see the market from many perspectives to see if my view is gaining or losing support. In updating my view, I become prepared to hold my position, trim my position, add to my position, or exit my position.
Looking at the market from multiple perspectives ensures that we can adapt to the ever-changing flows in markets. The goal is to prevent your conviction from turning you into a convict. Our views can imprison us, or they can evolve and help us navigate opportunity. A key trading psychology strength is open-mindedness and the flexibility to strongly believe something and to be very prepared to shift that belief.
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