Trade Aptitude

Results of Thursday’s Best S&P Futures Turning Points: Buying 4387.00 stopped out.

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

Buy 4339.25 stop 4334.00. Short 4421.75 stop 4427.50. 

The World Sentiment Index: (+100/-100) drops from -7 to -64 with all major world markets Bearish on rising volatility. 

Catalysts: Nothing on the economic calendar. China continues to struggle. Bond yields are staying high. Risk off. 

Quick Tip: Leftovers

Once you exit your winning trade there are only two outcomes. 

1. You left money on the table. 

2. You got out just in time.

Which do you suppose happens more often? 

The point is wherever we decide to exit, much if not most of the time you’ll leave money on the table. Knowing this in advance should alleviate some emotional reaction to being “wrong on that one.” 

There is benefit in documenting your exits versus the eventual MFE (Maximum Favorable Excursion). The data may suggest some high probability changes to your targets. 

Getting back to the psychology, Curtis Faith, one of the original Turtle Traders and author of Way of the Turtle, summed it up nicely: “Winning traders think in the present time and avoid thinking too much about the future. Being right and being wrong is not the approach to use. Ignore outcome bias.”

Outcome Bias defined: A cognitive bias that refers to the tendency to judge a decision based on its outcome rather than basing it on an assessment of the quality of the decision at the time it was made.

Is it time for you to learn all the biases that negatively affect your results? Click here for details.

Trade Fearlessly,

Mike Siewruk