This Makes Small Accounts Vulnerable

Hey friend,

Small-business optimism slipped in September, while existing-home sales rose 1.5% from August.

Tomorrow brings September’s Consumer Price Index report – a fresh read on inflation that could shift expectations for the Fed’s next move.

Let’s see how the markets have been moving.

The Daily Direction

Note: All indexes closed slightly lower yesterday and have been moving a bit lower today as well. The long-term direction for the Russell 2000 fell back into negative territory.

The Daily Nugget

Don’t let a small account push you into oversized bets.

A small account can make a good trade feel disappointing.

Say you make 5% on a $1,000 position. That’s $50.

You followed your plan and made money. But then you see someone posting a $5,000 win, and your own result suddenly feels like a waste of time.

So on the next trade, you put much more of your account on the line.

The setup hasn’t earned that bigger bet. You just want the profit to feel bigger.

That’s how frustration turns into a position-sizing problem.

With earnings arriving and inflation data ahead, there will be plenty of sharp moves to tempt you this week. Some will look like your chance to finally get ahead.

But one oversized loss can erase several good trades and leave you with even less money to work with.

Before entering, decide how much of your account you’re prepared to lose if the trade fails. Use that limit to set your position size.

If the potential dollar gain still feels too small, increasing the risk won’t improve the setup.

You can pursue substantial upside without making every trade a make-or-break bet.

Give your account enough room to survive the trades that don’t work.

The Traders Agency Team

P.S. Are you ready for the upcoming Social Security cut?