Trade Aptitude
Results of Wednesday’s Best S&P Futures Turning Points: No trade triggered.
Today’s Best S&P Futures Turning Points (consider wider stops and less size in fast moving markets):
Buy 5280.00 stop 5274.25. Short 5274.25 stop 5280.00 if price drops below and retraces to entry.
The World Index: (+100/-100) jumps from -14 to +21 with most major world markets mildly Bullish.
Catalysts: GDP & Jobless Claims @ 8:30. Chicago PMI @ 9:45. Pending Home Sales & UofM Consumer Sentiment/Inflation Expectations (revised).
Quick Tip: Expectations
“What are you struggling with?” was the question I asked a group of traders a while back. One woman said she had “expectation” challenges. She felt she needed to acknowledge that every trade cannot be a home run, or “10 to 1” as she phrased it.
I respected her self-awareness. Expectations is not a commonly voiced trading challenge. But it is real. You can expect too much and foster disappointment. You can expect too little and minimize your profits. Neither view is healthy for your ultimate results.
If you are documenting all the trades of your strategies (taken or not) then you will have hard evidence and know what to expect most of the time. The challenge arises when the market changes character and you are still “expecting” something different to happen.
In The Disciplined Trader by the late Mark Douglas, he identifies nine critical trading skills.
#6 - Learning how to let the market tell you how much is enough, instead of assessing the potential from your personal value system of how much is enough.
Here’s one way to let the market tell you: Look at the charts to assess present-time volatility. Adjust your expectations (profit targets, trailing stops) to the changing volatility. As Douglas said, we all need to learn this skill.
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Trade Fearlessly,
Mike Siewruk
P.S. Feel free to pass this along to your trading buddies. Share in the wealth!