Trade Aptitude
Results of Wednesday’s Best S&P Turning Points: Shorting 4143.25 offered 16.75 points.
Today’s Best S&P Turning Points (consider wider stops and less size in fast moving markets):
Buy 4133.50 stop 4127.75. Short 4206.50 stop 4212.25 (Both trades are cancelled for the 8:30 ET economic news).
The World Sentiment Index: (+100/-100) LIFTS from -14 to +21 in a world of mixed sentiment and low volatility. Historically it’s a coin toss which way price closes.
Catalysts: PPI, Philly Fed MFG, Jobless Claims & Housing Starts @ 8:30.
Quick Tip: How to Wait
Position and swing traders are naturally patient people. They must be. Their trades last days, weeks, months, maybe years. In fact, they probably chose the longer duration styles because they fit their personalities well.
Day traders likely chose the short duration trades because they wanted to see faster results (self-included). This would lead you to believe that day traders are impatient. Maybe many are but the fact is that patience is required for day trading as well.
Sitting patiently waiting for a setup while staying focused is a learned skill through practice and experience. There is one other “kind” of patience that is required though.
Here’s an example: Your strategy has edge and is profitable but like all strategies it will have losing streaks. There will be times when you’re treading water, breaking even, hour after hour, day after day.
How does a day trader desiring fast results handle the losing streaks and flat periods? They focus on the long term. Ironic isn’t it? You want to get paid on a regular basis from your daily trading efforts and you need to think long term.
Your expectations from the start need to accept this reality. Knowing in advance what to expect kills the emotional response when it happens. Knowing how long a losing streak or flat period is likely to happen is key. Knowing that the winning streak is around the corner keeps you in the game.
But you ask, “What if the winning streak doesn’t come? What if the strategy is broken?” The answer is to carefully monitor your equity curve and have rules to halt a strategy and re-start a strategy. Basically, you need more than one trading approach in your trade plan.
Our team day-trades multiple strategies with edge in a live online environment. Sometimes we’ll halt a strategy until it returns to “normal.” Join our team, learn the strategies, and trade live with us daily for 30 days. Money back if you’re not blown away!
Trade Fearlessly,
Mike Siewruk