Trade Aptitude

Results of Monday’s Best S&P Futures Turning Points: Neither suggestion triggered and the levels remain on the chart. 

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

Buy 4277.25 stop 4271.75. Short 4378.50 stop 4383.25.

The World Index: (+100/-100) eases from -40 to -33 with most major world markets Bearish. 

Catalysts: JOLTS @ 10:00. Same worries: Inflation, higher-for-longer interest rates, recession, and geopolitical events. Sentiment is not Bullish. 

Quick Tip: Continue or Stop? 

If your trading strategy has been suffering lately you should have been reducing your position size if not shelving it completely until the drawdown appears over. 

Choosing to continue trading with smaller size, while a valid rule, does present an expectation challenge. 

For example, if you started trading the strategy with a $10K commitment and after riding it to $16K you now see it’s down to $8K, you’re in a 50% drawdown. 

Your risk management plan required you to lower your position size on the way down. That’s good but now that your size is smaller your gains during the rebound will be as well. As it rebounds you’ll increase your size. Getting back to a new equity high will likely take a while. 

Adjusting your expectations, timewise, will keep you in the game. Expecting it to zoom back quickly is too optimistic. No worries if it does but you should recognize it may not happen. 

Consider this when you’re deciding whether to stop trading the strategy or continue with reduced size. If your expectations aren’t realistic you’ll lose confidence. Great traders are confident. Make the decision that will keep you confident. 

Are you struggling with tough decisions on your own?  Join our team. You can learn the strategies and trade live with us daily for 30 days. Money back if you’re not blown away!

Trade Fearlessly,

Mike Siewruk

P.S. Feel free to share this newsletter with your trading buddies.