Trade Aptitude
Yesterday’s results: Buying 5745.00 stopped out. The short idea didn’t trigger.
Today’s Best S&P Futures Turning Points: Short 5797.75 stop 5801.25. Buy 5800.50 stop 5797.00 if price retraces from above.
The World Index: (+100/-100) drops from +33 to -36 with extreme sentiment differences on higher volatility. For example, HK -9.4%, Shanghai +5.9%.
Catalysts: Trade Balance @ 8:30. Fed’s Bostic @ 12:45, Collins @ 16:00, Jefferson @ 19:00.
Quick Tip: Black Swans
Popularized by Nassim Taleb in the book of the same name, Black Swan simply means a rare, unpredictable, and high impact event.
Hurricane Milton is a Black Swan. It is the first hurricane in the Gulf of Mexico to travel from west to east in the last 100 years. My hometown for most of my life was the Tampa Bay area. If Milton continues on the forecast track he will make landfall near Tampa Bay, which could be devastating. Obviously, I’m deeply concerned and saddened.
With hindsight afterward, locals will probably make some changes to protect against a repeat. Buying a generator comes to mind as obvious. My point is that it takes a Black Swan to wake us up to what was highly unlikely to occur and adjust our risk.
The markets crash way more often than every 100 years. We’ve had eight in that time span. Even with that understanding you have to ask yourself if you have a financial plan for the next crash?
One of Taleb’s suggestions was to have a small slice of your wealth in high-risk, high-return assets, the rest in relative safety.
As a short-term trader, I think you could apply the same concept to your portfolio of trades. For example, a small slice in cryptos and higher volatility options or futures contracts. The majority in bread-and-butter trades that have been repetitive net winners for you.
Just an idea. Please share your ideas on solutions for applying this to short-term trading. Email me and I’ll report back for everyone. Let’s act like a team for everyone’s benefit!
Our trading teams focus on multiple strategies for day trading futures and high-probability candidates for 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!