The Daily Market Forecast... confidence
New feature: Daily S&P turning points
Tuesday’s Free Edition Results: You bought the bottom! The suggested long at 4650.75 was good for 37.25 at the close of the session.
Today’s Lesson: Confidence is key.
Let’s use the chart above to learn about confidence.
Context: Most world markets were bearish, ours is selling off fast for the past 60 minutes. Down 45+ points from the session-opening rally. You’re supposed to BUY. The old saying “don’t try to catch a falling knife” is repeating in your head. You lack confidence and you’re fearful of a loss so you “pass” on the trade.
Outcome: The strategy picked the bottom and ran for a healthy gain. Only 1.50 points of adverse move.
The Fix: You need to understand WHY a strategy has edge. It’s not enough to listen to a successful trader tell you THIS is the way it works. Until you OWN the confidence in the rules you won’t follow them.
Evidence: You can own confidence through experience for sure. But starting out that’s not possible. Then how? Evidence. Pure and simple you need to know from thousands of trades what the probability of success for EVERY setup will be.
Go to the chart above, look just before price touched the buy level and ask yourself “Why am I buying here?”
Here’s why you should have bought and not listened to your fears (evidence from a database of 9400+ trades):
- On Tuesdays, long reversal trades outperform breakouts.
- The prior Globex session traded below the prior day low, longs have outperformed shorts 10:1.
- It’s 11:00 and that’s a profitable time slot.
- The Reward/Risk ratio was 12:1
- This level was a “tertiary” volume level and reversals outperform breakouts by 33%.
If you’re curious about evidence-based trading and want to see ALL the results of our trading room every week, register below for our next LookBack (5) session. Our team gets together every Saturday at 10:00 to review and learn gaining more confidence. This session is now open to the public. Due to Thanksgiving, this week’s trades will be reviewed with next week’s trades on December 4th. Looking forward to “seeing” you then
Today’s Best S&P Futures Turning Points:
Short Level: Sell 4708 stop 4713.75 (5.75 risk). Same as yesterday.
Long Level: Buy 4668.75 stop 4664.50 (4.25 risk).
Happy Thanksgiving!
Mike Siewruk
P.S. Join us every Saturday morning @ 10:00 ET for our weekly LookBack (5) trade review session. Every trade for the week is analyzed. Now open to the public. Meet the team. Ask questions. Register here for the December 4th session.