The Daily Market Forecast
Wednesday’s Best S&P Turning Points Results: The short suggestion ran 16.25 points with only 2 ticks adverse move.
Quick Tip: Entry Finesse
The Volume Profile strategy we trade is proprietary. We’re looking for levels on the price axis, where spikes in trading volume occurred historically.
One nice feature of this method is we know in advance where the high probability turning points are located. This means we can place orders in advance.
The risk on the chart above was 4.75 points. If you wanted to limit your risk and not reduce your position size you might be tempted to place the order deeper in the level.
Here’s why that’s not the best idea. Notice on the chart of yesterday’s short idea that price only went 2 ticks against before delivering a decent winner. We know from hard evidence (>12,000 entries in all market conditions) that price will move against by 1 point or less 22% of the time. All of those trades are winners.
At least for this strategy, your better choice for risk reduction would be scaling in as price went against ensuring you “caught” all those winners. You can find out if this gives your strategy edge by documenting the Maximum Adverse Excursion (MAE) of every trade setup, taken or not. The results may be very eye-opening.
The World Sentiment Index: (+100/-100) RISES from -71 to -43 in a bearish leaning world. Historically the market closed lower from the open 56% of the time with losses 19% larger than gains.
Catalysts: GDP & Jobless Claims @ 8:30. UK kissing a recession. No follow-through on bond rally. Dollar up, risk off again.
Today’s Best S&P Turning Points (consider wider stops and less size in fast moving markets):
Short 3751.00 stop 3756.75.
Buy 3650.00 stop 3644.75.
Trade Fearlessly,
Mike Siewruk
P.S. Multiple strategies, software tools, teammates, and coaching. Learn why you should join our team here. For a personal consultation to assess fit (without selling) email me for an appointment: mike@thedailymarketforecast.