Trade Aptitude
Today’s Best S&P Futures Turning Points: Nothing tradeable today.
Thursday’s results: This strategy is on hold... but had a superb week of gains and may be back in business on Monday.
The World Index: (+100/-100) soars from -71 to +36 with all most world markets mildly Bullish on fading volatility.
Catalysts: PCE/Personal Income @ 8:30. UofM Consumer Sentiment (revised).
Quick Tip: How Not to Confirm
Many traders use a two-step process to enter their trades. The first is called a “setup.” Certain conditions appear ripe for an entry. The second step is called “confirmation.” The final evidence says pull the trigger.
Here’s an example: Our trend strategy will signal that a trend is starting based on a chart pattern and current volatility. But that is not when the entry occurs. We wait for confirmation by looking for additional signals, then buy on a retracement to reduce risk and improve price. Simple enough.
Yesterday a trade signaled and confirmed. It was worth 26 S&P points. I didn’t take it. I fell into a trap called Confirmation Bias. This is when you have a belief and rather than look at evidence objectively you focus on the evidence that supports your belief. The good news is that I immediately recognized my mistake and journaled the details. Had I not understood Confirmation Bias I would never be able to correct the mistake and improve.
This bias holds you back. It’s rooted in your beliefs, which can be erroneous in many cases. Consider the person who believes they can’t “beat the market” even though countless traders do so every day. Their belief will get them exactly what they want. Nothing.
Not comfortable with your strategy yet? Our Swing Trading team uses unusual options trades and Insider buys for candidate selection. These are setups with considerable evidence from thousands of trades. We use a tool that makes this incredibly easy. Watch the demo here. No disappointments!
Trade Fearlessly,
Mike Siewruk
P.S. Feel free to pass this along to your trading buddies. Share in the wealth!