Trade Aptitude
Results of Thursday’s Best S&P Futures Turning Points: Price traded in a relatively narrow range, neither suggested trade triggered.
Today’s Best S&P Futures Turning Points (consider wider stops and less size in fast moving markets):
Buy 4111.50 stop 4106.50. Short 4148.75 stop 4154.00.
The World Sentiment Index: (+100/-100) is worthless today as Hong Kong and Europe are stilled closed for the Easter holiday.
Catalysts: Nothing on the economic calendar. Strong U.S. payrolls data on Friday during a closed market. Next big release is CPI on Wednesday.
Quick Tip: Why Stats Matter
Here’s an important quote from Nassim Taleb, celebrity author of Black Swan and Antifragile, “Whether it’s Covid, vaccines, Bitcoin, or stuff about elections, we’re swayed by the anecdote. So our world is becoming more complex, requires more statistical sophistication while social media is driving us to the most primitive way of thinking.”
Basically, he’s saying that we can be swayed by single or random events or stories rather than statistics, numbers and scientific rigor.
This pertains to trading perfectly. You see a one-off winning event and are wanting to repeat it. Maybe it even happened a few times. But how robust is that analysis? Not at all.
Before changing your plan or trading the anomaly you just saw, do some research. If you’re able to code the event in back-testing software like EasyLanguage from TradeStation, do it. If not you’ll need to scan the prior price charts by hand.
What are you looking for? Start by gathering a sample size of 30 events. If the results showed a positive result you might have found something. The problem is the sample size is small, your margin of error is around +/-18%. But it’s worth doing a bit more research. Get to a 100-trade sample size and your margin of error drops in half. Now you’re motivated to continue the research.
Our team day-trades multiple strategies with edge in a live online environment. Each strategy has been rigorously tested for edge with samples of thousands of trades. 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