Trade Aptitude

Results of Thursday’s Best S&P Futures Turning Points: Shorting 4543.75 ran for 51 points to the buy level at 4492.75 that bounced offering 13.50 points. 

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

Buy 4439.50 stop 4436.00. Short 4510.25 stop 4516.00.

The World Sentiment Index: (+100/-100) slumps from +37 to -36 with most major world markets Bearish on rising volatility. 

Catalysts: PPI @ 8:30. UofM Preliminary Consumer & Inflation Sentiment @ 10:00. 

Quick Tip: Open Trade Management

Money messes with our heads. Until you get a grip on the emotions associated with winning and losing, you’re unlikely to succeed. 

Here’s a viewpoint I learned from one of the all-time great traders, Larry Williams: “More money is lost due to overstaying positions (greed) than exiting due to the fear of losing money.” 

Your fear is likely solved by using stops that lose an amount of money you can accept. Easy enough.

If Larry is correct, and I do believe he is, then greed is solved by pre-planned profit targets and open trade management rules. Planning targets is easy, open trade management requires skill and discipline. 

Here’s a review technique that should help: Look at the chart above. The short and the buy were yesterday’s best turning points (you’re welcome!). Use a sheet of paper to block out the results of the short after entry. Start slowly moving the paper exposing the results. 

Where would you take profit? If you trade multiple contracts, and you should, you will scale out. In our trading room we usually leave the last contract for a greedy target and trail stop, just in case we catch a huge move. It doesn’t happen often, but the few you get will make your day, maybe even your week. 

Tired of trading alone? Join our team. Learn multiple strategies with edge and collaborate with some great traders. Click here for details. 

Trade Fearlessly,

Mike Siewruk