The Daily Market Forecast... anticipation
Tuesday’s Blog Results: The suggested short at 4623.50 stopped out.
Today’s Trading Tip: Anticipation
Plenty of time in trading is spent waiting. Waiting for a setup, waiting for an economic release, waiting for a profit target. Lots of waiting.
Here’s how to make this “downtime” productive: Practice anticipation. Get in the habit of asking “What if…?” questions. Answer them. In doing so you’ll be making decisions in advance and be able to act on the spot. No wondering, guessing, procrastinating or flat-out missing the trade. You’ve committed with foresight.
Here's a simple example: Price is slowly moving sideways. Your entry price to buy is far enough away that you don’t expect to see it trigger soon. Suddenly price plunges. The speed candle down is looking powerful.
Now is the time to anticipate. Why is this happening? What catalyst occurred? Will it continue or reverse? What are the likely outcomes?
What CAN happen to price?
- Slam through your entry and you’re stopped out instantly.
- Turn after you enter and rapidly rise.
- Stall after you enter and move sideways.
- Stop falling before entry and rocket higher.
What will you DO for each outcome? Know this in advance.
OK… I can hear you now. “Mike, this is all in my trade plan already.” As it should be. But what OTHER rules might be beneficial if you started practicing anticipation? Instead of just waiting around.
Here’s an advanced tip for you. Insert Bollinger Bands on your chart. This popular and elegant technical indicator has stood the test of time for one VERY GOOD reason. It measures volatility and volatility is one of the few conditions in the market that CYCLES in a predictable way. It’s the perfect “anticipation” indicator.
If you want a LIVE trading demo of one great way to use the bands, join us this Sunday night for LookBack (5), our weekly trade review session. Click here to register.
Today’s Best S&P Futures Turning Points:
Short Level: Sell 4681.75 stop 4686.00 (4.25 risk).
Long Level: Buy 4587 stop 4581.25 (5.75 risk).
Trade Well,
Mike Siewruk
P.S. Join us this coming Sunday @ 5PM ET for our weekly LookBack (5) trade review session. Every trade for the week is analyzed. BONUS: We’ll open the Globex session and trade live. Register here for the December 26th session.