Trade Aptitude

Results of Thursday’s Best S&P Futures Turning Points: Shorting 4631.50 caught the high of the session and ran for 41.50 points to the suggested buy at 4590.00, which stopped out. Feel good about your win by donating a slice to my favorite charity the Alzheimer’s Association. Click here.

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

Buy 4531.75 stop 4527.50. Short 4615.00 stop 4620.75. 

The World Sentiment Index: (+100/-100) drops from +50 to +21 in a world of mixed sentiment. 

Catalysts: PCE Price Index & Personal Income @ 8:30. UofM Consumer Sentiment (revised) @ 10:00. INTC surprises, risk back on. 

Quick Tip: Better Targets

Stops are so easy. Pick your risk number, determine position size, hit enter. 

Profit targets are trickier. 

If you ask yourself what would be the best thing to know before you enter a trade, eventually you’ll come to the answer that matters… how far in my direction will it go? This is called Maximum Favorable Excursion (MFE). We’ll never know this when we enter a trade, but we can use probabilities from prior MFE to help our target placement. 

Here’s how: Start capturing the MFE for every trade your strategy presents, whether you took the trade or not. If you can go back and add this data to prior trades, spend the whole weekend doing it. 

Once you have a sizable dataset (at least 100, more is better) it’s simple to figure out the probabilities. For example, in our intraday trend strategy, a 4-point target fills 60% of the time for the S&P futures, before any other trade filters are applied. Seems like a great target to start scaling out, doesn’t it? 

Tired of trading alone?  Join our team, learn several strategies, and trade live with us daily.  Money back if you’re not blown away! Click here for details. 

Trade Fearlessly,

Mike Siewruk