Trade Aptitude

Results of Friday’s Best S&P Turning Points: Neither suggestion triggered. 

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

Buy 4001.75 stop 3998.00. Short 4082.50 stop 4088.25. 

The World Sentiment Index: (+100/-100) DUMPS from +17 to -43 with most of the major world markets bearish on rising volatility. Historically price closed up only 44% of the time. 

Catalysts: Nothing important on the economic calendar. Mood is risk-off. 

Quick Tip: Expectations

Having taught over 4000 traders in the past 15 years the goal I’ve heard most often is the desire for consistent profitability. 

You know what profitability is but how do you define consistency in trading? Time enters the definition. If you want to duplicate the consistency of an hourly wage or weekly paycheck, good luck! 

In Dr. Brett Steenbarger’s excellent book, Enhancing Trader Performance, he mentions a conversation he had with all-star trader Linda Raschke. She openly admitted that much of her annual profit comes from a couple of very good months. She understands the cycles that occur in her strategy’s performance. Her expectations of consistency have a longer-term view. 

Your willingness to persist through the inevitable losing streaks comes from your experience. Been there, done that. 

If you’re starting out with unrealistic expectations you probably won’t persist to consistency, whatever that time cycle is for your style of trading. 

An excellent way to shorten your learning curve and acknowledge what consistency is for you is to document hundreds of trade setups. Plot the data on a chart. You’ll see the winning and losing streaks. This should give you the confidence to persist. 

Here’s an example: In our trading room we have an intraday trend trading strategy with fabulous edge. But it doesn’t generate a consistent profit every month. Some months are huge winners, some are modest, some are about breakeven, some are losers. No worries, we know that overall, the edge is there and so will the profit. Without the documentation over different market conditions having the confidence to persist would be difficult if not impossible. 

Invest the time into deep research before risking your money. 

Another short cut is to join a trading team. In our trading room we manage multiple strategies with edge and focus heavily on documentation to gain confidence. Learn more here. 

Trade Fearlessly,

Mike Siewruk