Trade Aptitude
Results of Thursday’s Best S&P Turning Points: Neither suggested trade was triggered in a relatively narrow range day. They remain on the chart.
Today’s Best S&P Turning Points (consider wider stops and less size in fast moving markets):
Buy 3892.50 stop 3887.50. Short 3945.00 stop 3950.00.
The World Sentiment Index: (+100/-100) SOARS from -64 to +50 with all major world markets mildly Bullish on lower volatility. Historically the close was higher than the open 42% of the time.
Catalysts: Existing Home Sales @ 10:00. Not much else.
Quick Tip: Ask Yourself “Why?”
Why are you trading? For profit! There is no other logical reason to speculate.
Dig deeper. What kind of profit do you want? Small, consistent “paychecks” or big wins? There is an important difference between the two decisions.
If you’re looking for frequent small gains you’re likely a day trader and should be taking profits quickly. The reason is market “noise.” Watching price move on an intraday time interval you’ll see the swings up and down repeatedly. This is not as evident in a higher time interval price chart.
If you’re looking for big moves and large gains you should avoid the intraday time intervals. They will only cause you to overtrade. Of course, seeking the large gains you’ll need staying power (more capital) to weather the volatility. Or the psychological strength to win fewer but bigger trades and experience more smaller losses.
The point is this: the amount of risk capital you have will determine your answer. Starting with modest risk capital and shooting for big gains is likely to diminish your account to an untradeable level before you hit the big wins.
If your preference is big wins and you have limited risk capital it’s best to start getting the smaller wins and grow your account to the appropriate size for trading for big wins.
If a picture is worth a thousand words then a live real-money demo of our trading strategies should be better. Click here to watch the recording of our Live Trading session trading the S&P futures. Lessons included. This recording comes down on Sunday night.
Trade Fearlessly,
Mike Siewruk
P.S. Feel free to share this blog with all your trading buddies.