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Today’s Best S&P Futures Turning Points: Nothing tradeable today.
Tuesday’s results: This strategy is on hold.
The World Index: (+100/-100) lifts from -29 to +7 with Asia Bearish and the west Bullish on low volatility.
Catalysts: ADP Employment Change @ 8:15. S&P Services PMI Final @ 9:45. ISM Services PMI @ 10:00. Crude Oil Inventories @ 10:30.
Quick Tip: Exit Art
In teaching over 4000 traders in the past 15 years I’ve found the most common goal is finding better trade setups. It seems we naturally want to know when, where and with what we are going to get started. Entry rules.
The fact is that entries are easy to find. Investing much of your research time on finding better entries is not nearly as productive as finding better exits.
Why? Because you win or lose on the exit you choose. It is the most important rule set in your plan. You should be testing many exit strategies. Keep your entries simple.
Here’s an example: A common trend entry is to determine trend, wait for a pullback, enter in the direction of the trend. This is not rocket science. Look at charts all day long and you’ll see that trends in either direction are seldom smooth. They have impulses and corrections. It makes sense to enter on a correction, a dip in price, with the expectation the trend will continue.
How you exit is critical to your success. Get out too early and your risk/reward profile will be poor. Wait too long and you’ll give up acceptable profit, breakeven, or even lose open profit.
Exits are art and science. The science is relatively easy. Scale out, use fixed dollar amounts, chart features like double tops, volume levels, support, resistance, Fibonacci extensions, etc.
The “art” comes from experience. You learn the art of the exit by trading in various market conditions. This takes time so the practice is invaluable. Use sim mode. Choose different market conditions (choppy, trending, volatile, quiet). Document the kinds of exits that work best.
Trade Fearlessly,
Mike Siewruk
P.S. Feel free to pass this along to your trading buddies. Share in the wealth!
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