In this week’s Enlightened Stock Trading newsletter we cover:
📈Stock Market Update: What happened in the markets this week
⁉️Scenarios: What could happen next & what to do about it
🧠Trading Psychology: You don’t belong here… and the lies we tell ourselves
💰Kelly Criterion: Is it a trading elixir or disease?
🎓Learning to trade: How to pick the right trading course for you
🧠Trading Tip: Position sizing to survive long term
📺Trading Video: Managing market risk with trading systems
Let’s jump in…
Stock Market Update 22 March 2025
There was a collective sigh of relief this week in the investing community as the grinding melt down in the markets finally paused in time for a few green candles. The VIX fell 11% compared to last week and most of the global stock indices rallied…
But is this the end of the correction or the calm before the storm?
And how can we position ourselves in situations like this?
Keep reading and we will discuss both questions… First a quick look at the the global stock market indices for markets that we trade at EST.
Watching the S&P 500 and the Nasdaq and talking to traders this week it certainly FELT less panicked. However, the unfortunate reality is that few down trends progress all the way to the bottom with no correction (rally) to break up the decline.
Ok the Covid Crash was an exception to this, but in general, if there is a big correction or a bear market there is generally a rally (or two) in the middle of it. This means that the market might just be taking a break before another down leg, but we just don’t know yet.
You can see from the chart above that more than 50% of stocks are still below their 200 day moving average in all of these markets except TSX which is right on 50%. Certainly not a sign of underlying strength!
So is this the end of the correction or is this the calm before the storm?
Remember that as systematic traders our job is not to predict what will happen, our job is to assemble a portfolio of strategies that will give us the chance to profit in a range of market conditions.
To me this looks like it could be the calm before the storm (I don’t know if it is quite like the Simpsons Gif above, but it made me smile so I thought I’d share it here).
Let’s be clear, I am not going out and dump everything because that would be a discretionary call that would likely end in disaster. The situation just makes me ask the following questions:
1. What could happen next?
- The market could continue rallying, OR
- There could be another leg down
2. What would happen in my portfolio in these scenarios?
- I still have open long positions which will benefit from a rally, but be cut fairly soon in another down leg
- I have some short positions which will benefit in a down leg but be cut if the market rallies much more
- I have some short systems that have not yet turned on which will likely give signals if the market declines further from here
So it probably doesn’t matter to my portfolio all that much what happens next, and this is exactly the position I want to be in.
The question for you is:
How could what happens next impact your portfolio?
While you ponder that, let’s have a quick look at how the markets actually moved this week. The US markets had a bit of a rally, but as you can see from the sectors below, it was not driven by tech, there was just a pause there.
The rally was mostly driven by the energy sector and interestingly (just for a change) small caps did much better than large caps with the Russell 2000 rallying 3.9% vs the 0.5% in the S&P500.
I like cheering for the little guy and there is something about a small cap rally that I like. Seeing the corporate behemoths forging further ahead doesn’t make me smile quite as much (again to be clear, my trading decisions are 100% systematic and personal views like this don’t have any impact on what I do in the markets).
The global markets were pretty much green across the board this week. But as you can see the Hong Kong / China markets that I raved about last week had a bit of a correction. This shows that the correlation between western markets and China is low right now – another reason to be diversified across both.
All in all this was a pretty sedate week in the markets, especially if you are both long and short in the portfolio. The next direction the market chooses will have far more profit potential regardless of whether it is long or short.
Key message for this week – systematic traders should think in terms of scenarios. If there is a potential scenario that you are afraid of because it will hurt your portfolio, that tells you where you need to work on your trading.
If you want help to close the gaps and build a globally diversified portfolio fast – Click there to apply to join The Trader Success System.
“You Don’t Belong Here”… & Other Lies We Tell Ourselves
Have you ever caught yourself thinking, “One day they’ll realise I don’t actually know what I’m doing…”?
It’s a common mental loop—especially for analytical high-performers like traders, managers, and logical thinkers. That nagging internal critic that whispers: “You just got lucky. Don’t blow it.”
But here’s the thing—impostor syndrome doesn’t mean you’re broken. It means you care. You’ve worked hard, you’ve achieved, and now your brain is just trying to protect you… poorly.
That’s why I’m inviting you to the Rethinking Impostor Syndrome™ Workshop on Friday, March 28th at 12PM Sydney time being facilitated by our Trader Mind High Performance Coach – Stephanie Barros.
This isn’t a “think positive and manifest success” session. It’s real, research-backed, and refreshingly honest. We’ll unpack the internal friction that leads to:
- Overpreparing for simple things.
- Holding back ideas in meetings.
- Procrastinating on trades, projects, or goals.
- Thinking your results are luck, not skill.
And no, it’s not just you. I’ve coached enough high-achieving traders and professionals to know this: success without internal alignment always feels fragile.
If your confidence has a ceiling… this is where we shatter it.
Click Here to Register Now >>> https://bit.ly/RIS-Program
Reserve your seat now — spots are limited!
The Kelly Criterion: The Smartest Way to Manage Risk & Maximize Profits
John Kelly’s formula was designed to maximize wealth while managing downside risk. It’s promise is simple – bet the optimal fraction of your capital on each trade and make the maximum returns.
Sounds great right?
But there’s a couple of huge catches… read the full article to discover what they are
How to Pick the Right Trading Course (and Avoid Scams)
Not all trading courses are created equal. Many promise fast profits but hide the real costs—expensive upsells, broker commissions, and unproven strategies.
Here’s how to spot the red flags 🚨:
❌ Beware of “cheap” courses that lead to high-ticket upsells.
❌ Avoid forex & day trading courses—they profit from your losses.
❌ Skip Coursera courses—many are AI-generated and lack real mentorship.
Instead, focus on courses that offer:
✅ Proven, backtested trading systems
✅ Lifetime access with no hidden fees
✅ Direct mentorship from a successful trader
If you’re serious about trading, don’t waste time on fluff. Find a course that actually delivers results:
Trading Tip of the Week
Smarter Position Sizing
Most traders think the key to success is finding the perfect trade. The truth? It’s about position sizing.
🔹 Never risk more than a set % of your capital per trade (Ideally <1%).
🔹 Skip aggressive techniques like the Kelly Criterion.
🔹 Your edge is only real if you can survive losses.
🎯 Actionable Step:
Before your next trade, ask: “Am I risking an amount that lets me survive a losing streak?”
Quote of the Week
System Trader Launchpad: Your 6-Week Shortcut to Smarter Trading
If you’re new to systematic trading and just want to ‘dip your toe in the water’, you don’t need to spend years figuring it out. The System Trader Launchpad gives you a complete, structured approach—so you can start trading confidently in just 6 weeks.
🔹 Two fully backtested trading systems—ready to use ✅
🔹 Pro-level risk management techniques to protect your capital 🔥
🔹 Daily trading routine setup for maximum efficiency 🚀
🔹 100% risk-free guarantee – 30 days, love it or your money back.
Want to trade with confidence instead of second-guessing your moves?
Featured Video: Managing Market Risks with Trading Systems
Do you really know if your trading strategy works? Most traders don’t—and it costs them big.
Backtesting is the key to trading with confidence—but most people do it wrong.
In this video, you’ll learn:
✔ How to eliminate risky trades before they destroy your account
✔ Why traders fail when they ignore data
✔ The simple tweaks that improved my trend-following strategy dramatically
Watch now and start refining your trading strategy:
Do me a quick favour and reply to this newsletter – give me a score 1-10 of how interesting and useful you found it… feedback helps improve everything!
I appreciate you – thanks for reading this week’s stock market update.
Remember – You are only one trading system away!
Adrian Reid
Founder, Enlightened Stock Trading
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