Trade Aptitude

Results of Tuesday’s Best S&P Futures Turning Points: : Neither trade triggered. 

Today’s Best S&P Futures Turning Points (consider wider stops and less size in fast moving markets): 

Buy 4798.00 stop 4794.50. No shorts suggested. 

The World Index: (+100/-100) drops from +29 to +7 with the major markets mixed. 

Catalysts: Consumer Confidence & Existing Home Sales @ 10:00. Crude Oil Inventories @ 10:30. Fed’s Goolsbee @ 12:00. 

Quick Tip: Trade Plan Updates

In your trade plan you’ve established a set of rules that when followed, show a positive outcome (if not, get it done). 

Most trade plans start simple. When to enter and exit. Which asset to trade. Which tools to use. How much to risk. 

That’s a good start but the real meaty rules come from live trading experience. We can’t possibly consider all outcomes and influences in the beginning. We need to trade live, observe, document, and mine the data for new rules to improve. This means your trade plan is a living document. It should evolve. 

Add to all that the fact that markets change character. This means you will eventually experience enough change to add conditional rules to your plan. These are rules you never thought of until you witnessed the result live trading. 

Beyond the typical stats you’re keeping, here are a few data points you should record for every trade triggered in your plan, taken or not.

1. Time based stats including time of day, day of week, day of month. 

2. Sentiment of major world markets.

3. Correlated assets including inverse. 

4. Catalysts.

5. Technical indicators. Your favorites and a few you never use.

6. Alternative entry and exit rulesets. 

That last stat is critical. While you already have an entry/exit ruleset with edge, how do you know it will endure? What happens to those rules when the market changes character? Does their performance stay positive but become better or worse and in what market conditions? 

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Trade Fearlessly,

Mike Siewruk

P.S. Forward this blog to your trading buddies. Share in the wealth!