Trade Aptitude

Today’s Best S&P Futures Turning Points: This strategy remains on hold but is improving.

The World Index: (+100/-100) eases from +21 to +14 with sentiment mixed and volatility lower. 

Catalysts: S&P Home Price Index @ 9:00. Consumer Confidence & Richmond MFG Index @ 10:00. 

Welcome back to Poker Week! If you didn’t read yesterday’s blog now is a great time to do so. All week we’re exploring poker lessons that are also invaluable to traders. Enjoy!

Lesson #2 Big Wins Vanish

Trading results, just like poker results, cycle between winning streaks, losing streaks, and flat periods where wins and loses cancel each other out. Let’s focus on winning streaks today. 

Whether it’s one monster winning trade or a series of winning trades, you’ll likely start to feel invincible. It will last for a period in which you won’t even think about the losing streaks or flat periods when it took all the courage you had to continue trading. You’ll feel calm, relaxed, and arrive at a state that you think will never end. 

You may let your guard down and start taking lower probability trades. You will overtrade. You’ll size up and risk more. You’ll be tempted to spend extravagantly on life’s pleasures. 

You might even think that you can now “afford” to lose some because you made so much more than you expected. Unfortunately, this is a self-fulfilling prophecy. 

Veering away from the rule-based discipline that got you the winning streak will just as quickly take the gains away. 

The solution is to recognize this inevitable condition. Add this rule to your trade plan: “When I experience fast and easy gains and I start to feel I’ve mastered trading, I’ll review my plan and get more disciplined and focused. I’ll work harder.” 

Our trading teams focus on day trading futures and swing trading options. Maybe you'll fit right in. You can try either or both risk-free. 

Trade Fearlessly,

Mike Siewruk

P.S.  Feel free to pass this along to your trading buddies. Share in the wealth!