Trade Aptitude
Results of Thursday’s Best S&P Futures Turning Points: Buying 4385.75 filled in the Globex last night and ran for 18.50 points so far.
Today’s Best S&P Futures Turning Points (consider wider stops and less size in fast moving markets):
Buy 4228.50 stop 4223.25. Short 4328.00 stop 4333.25.
The World Index: (+100/-100) dips from -50 to -64 with all major world markets Bearish on increasing volatility.
Catalysts: Fed’s Harker speaks @ 9:00. Middle East conflict escalating. Risk-off mood.
Quick Tip: Ratio Exits
Our volume-at-price strategy usually performs better in the Globex session. We know this from thousands of documented trades. The challenge for most of us is we’re sleeping!
Setting a planned entry before bedtime is no problem. Optimizing the exit is the tricky part.
One common exit is the trailing stop using initial risk. The downside is price can get spiky taking you out of what became a great trade. On the chart above the trailing stop would have you out around breakeven.
One great trader on our team uses what I’ll call the Ratio Exit.
Using last night's trade as an example we know that this strategy has a 49%-win rate over 5037 trades. Obviously we need to have average winners greater than losers. Pre-setting your exit to a ratio of more than 1:1 nets a positive result. How much to use is the question.
Assessing the chart for potential support/resistance can help determine your ratio. There was plenty of room for this trade to target a 3:1 ratio. With an initial risk of 5.75 points and a target of 17.25 points, that filled in a couple of hours.
Some charts will offer less, some more. The key is to know your win percentage and only enter those trades that offer a positive expectation ratio. With this evidence you can effectively trade the Globex session.
Tired of trading alone? Join our team. You can learn multiple strategies tuned for different market conditions and trade live with us for 30 days. New reduced price offer. Money back if you’re not blown away!
Trade Fearlessly,
Mike Siewruk
P.S. Feel free to share this newsletter with your trading buddies.