Trade Aptitude

Yesterday’s results: Buying 5422.25 just missed picking the bottom of a wild session, offering a 4.75-point scalp before stopping out. 

Today’s Best S&P Futures Turning Points: Buy 5484.75 stop 5480.75. Short 5656.25 stop 5660.25.

The World Index: (+100/-100) soars from -21 to +57 with most major world markets firmly Bullish. 

Catalysts: PPI, Jobless Claims @ 8:30. 30-year bond auction @ 13:00. 

Quick Tip: Self-Serving Bias

Trading is more psychological than mathematical. Although the quants might disagree, if you study other successful traders you’ll see they do agree. 

Aside from our human problems about “winning is good, losing is bad” and “being right is good, being wrong is bad,” we have biases to contend with. There are plenty. 

One bias I discovered recently while reading Thinking in Bets: Making Smarter Decisions by Annie Duke, arguably the best tournament poker female who ever played, is Self-Serving Bias. 

Simply put this bias has us giving credit to our skills when we win and blaming bad luck when we lose. Very egotistical, but it prevails in all life’s outcomes, not just trading. 

The fact is that sometimes when we win our skill was the reason but not all the time. We do get lucky wins. Conversely, sometimes when we lose bad luck is to blame, but not all the time. We do make mistakes. There are plenty of gray areas here. 

The obvious problem with this bias is it can prevent us from learning from our failures. Annie admitted she struggled with this bias as a professional poker player. Her solution was simple. Acknowledge it can happen and be conscious of when you’re acting it out. 

That will take some practice, for sure, so get that message to yourself every day during your morning routine until it’s a habit. 

Our trading teams focus on day trading futures and swing trading options. Maybe you'll fit right in. You can try either or both risk-free. 

Trade Fearlessly,

Mike Siewruk

P.S.  Feel free to pass this along to your trading buddies. Share in the wealth!