Good morning, traders…
Let’s say you find the perfect setup that works for you, over and over again…
When you see that pattern, you execute. You’re ruthless. The vast majority of your trades are green.
Everything in your trading is going gangbusters. Your confidence is surging, your trades are working, and your account is growing…
Until it isn’t.
Seemingly overnight, those slam-dunk trades turn into immediate stop-outs.
You’re left scratching your head, wondering why your go-to pattern doesn’t work as well as it once did.
Sound familiar? It should. The stock market is shifting.
The bearish signals have been stacking up since the big sell-off on October 10.
And if you aren’t adapting to them … you could get destroyed.
No setup, trend, pattern, or cycle lasts forever. The market always changes (and the effectiveness of strategies changes with it).
And just as you’re getting comfortable with the way this choppy market trades, there will likely be another trend reversal, starting the cycle all over again.
It’s a feature, not a bug. But it doesn’t have to ruin your trading.
This Is How To Adapt To A Trend Reversal.
No Trend Lasts Forever
Adapting your strategy is crucial to long-term trading success.
Markets are cyclical. Trends come and go, just like they do in art or fashion.
But when a particular setup you’ve been trading stops working, you need to recognize the shift happening beneath your feet — and adjust your strategy accordingly.
Look at the last five years of the Nasdaq…
As the pandemic shutdowns weighed on public activities throughout 2020 and 2021, the tech sector broke out:
It made sense. With in-person abilities limited, people relied on technology than ever before.
Bulls were scalping or swinging tech calls throughout the entire pandemic bull run, making a fortune.
Then January 2022 rolled around…
The Fed started hiking rates in the face of rising inflation.
Suddenly, it was impossible to make money playing tech calls. Every long position in tech started getting destroyed.
Then, the trend reversed again…
By January 2023, the market had flipped back to the upside (and hasn’t reversed since).
Traders who didn’t adjust their strategies as these trends shifted went from making gains hand over fist to helplessly wondering why they’re losing every day.
Now, history is repeating itself. I’m seeing major structural red flags in the stock market.
And as the market trend shifts, your trading strategy should adjust with it…
How To Adapt To A Trend Reversal
Stay Hedged
When the VIX rises, I buy protection.
If I’m trading long calls, I’m hedged with SPY/QQQ puts (or VIX calls).
Just like I have (very expensive) tornado insurance on my house (thanks, Florida).
I lose some upside, but I’m insured against disaster.
No one knows what’s gonna happen next week, tomorrow, or even an hour from now.
I want you to be prepared for any possible outcome.
Tweak How You Use My OMEN Scanner
I’ve made a few small changes to how I filter my OMEN Scanner this week:
Filter settings: Premium minimum around $100,000, trade size minimum around $1,000.
Set to ask side or “above ask” so I’m seeing aggressive buying, not passive fills.
During the day: Switch to “options count” and sort by most activity to spot repeated flow.
This helps me identify what Smart Money is doing, like repeated waves of call buying, aggressive sweeps, or unusual activity.
When you see Smart Money flow coming in early (say by 10:00 a.m.), you can flag it and set your alerts.
Go Back To The Basics
Markets shift. Setups stop working. If you’re still trading the same way you were six months ago, it’s time to adjust.
That’s why I’m going back to the basics and trading the 1 strategy that works in 80% of market conditions.*
I’m talking about the same approach I used to turn $50 into $1,260 in just 2 months…*
And I’m about to reveal exactly how YOU can weaponize this strategy during my Simpler Options 2-Day Virtual Bootcamp.
If you’ve been wanting to understand how options really work, now is the time…
The market won’t wait for you to figure this out on your own.
The market won’t wait for you to figure this out on your own.
*Past performance does not indicate future results
