Today’s Best S&P Futures Turning Points: Nothing tradeable today.  

Friday’s results: This strategy is on hold. 

The World Index: (+100/-100) dips from -36 to -43 with most major world markets Bearish. 

Catalysts: Nothing obvious today, waiting on FOMC Wednesday. 

Quick Tip: Entries are Exits?

Exiting your trades is when all the money is made or lost. The loss is a simple decision, where your stop order rests. The profit decision is trickier. 

Imagine you’re long and price is behaving well, moving up firmly. The only certainty you have is that it won’t go up forever. There will be stalls, corrections, bases, and reversals within the move. 

When do you take profit? 

Some traders make this an arbitrary decision. A dollar amount. But that may not be optimal. 

Other traders will use a trailing stop. If you do, make sure you’re adjusting the stop distance for current volatility. And recognize that you will always give up a good chunk of open profit. 

Experienced traders look for p...

Today’s Best S&P Futures Turning Points: Nothing tradeable today.  

Monday’s results: This strategy is on hold. To understand why, read yesterday's newsletter.

The World Index: (+100/-100) plummets from +57 to -29 with most major world markets Bearish.  

Catalysts: JOLTS & Factory Orders @10:00

Quick Tip: Your Hot List

If you’re a directional stock or options trader you know the importance of stock selection. All the trading skills in the world don’t matter if you’re trading assets that don’t move. 

You could look at the historical performance of stocks to assume their past will repeat in the future but that’s not ideal. 

There is a better way… a true Leading Indicator. Insider buying. Key executives have only one reason to write 7 and 8-figure checks to own more of their company. They think it’s going up and research has proven this to be true.

From "The Effect of CEO Insider Trading on Firm Performance” published in the Journal of Business Research in 2021. This study found t...

Today’s Best S&P Futures Turning Points: Nothing tradeable today.  

Friday’s results: This strategy is on hold. 

The World Index: (+100/-100) soars from -14 to +57 with all major world markets Bullish.  

Catalysts: Final MFG PMI @ 9:45. ISM MFG PMI, MFG Prices & Construction Spending @10:00

Quick Tip: When to Stop

All trading strategies have drawdowns (a protracted losing streak). The challenge is trading through it. You can’t stop thinking that it may “never come back” or churn for an extended period. Or you could get FOMO and think if you stop now it will roar back and you’ll miss the gain. Obviously, these thoughts are destructive. Don’t go there. 

What you should do is have Stop-n-start rules to follow. These are rules that tell you when to stop trading the strategy and when, if ever, to start up again. This will take the emotion out of the process. Apply these rules to the performance of individual strategies, not your whole trading account. 

Here’s an example of a rule set...

Today’s Best S&P Futures Turning Points: Nothing tradeable today.  

Thursday’s results: This strategy is on hold. 

The World Index: (+100/-100) eases from -29 to -14 with sentiment mixed on varying volatility, leaning Bearish. 

Catalysts: PCE Price Index, Personal Income & Spending @ 8:30. Chicago PMI @ 9:45. Fed’s Williams @ 12:05. 

Quick Tip: Good Question

Think for a moment before you answer this seemingly simple question. Do you find it harder to take a loss or a profit? 

The answer says a lot about your trade plan, style, trading psychology, and what you need to work on. 

If your answer was a loss, then your risk management plan needs help. You’re probably risking too much. You might be trading the wrong strategy, one with more losers than winners like trend following. Your personality might be the problem if you get annoyed being wrong (trading is about probabilities, not certainties). 

If your answer was a profit, then your risk management is fine, but your profit target...

Today’s Best S&P Futures Turning Points: Nothing tradeable today.  

Tuesday’s results: This strategy is on hold. 

The World Index: (+100/-100) eases from -43 to -29 with sentiment mixed on varying volatility, leaning Bearish. 

Catalysts: GDP, Jobless Claims, PCE Advance @ 8:30. Pending Home Sales @ 10:00. Crude Oil Inventories @ 11:00. Fed’s Williams @ 12:05. 

Quick Tip: Get PAID

Trade plans are essential. But they are one piece of the puzzle. Aside from all the common components your Trade Plan needs an overriding structure, method, philosophy. We created the PAID method of trading to accomplish this. 

PAID is an acronym for Plan/Abundance/Investigate/Decide. Simply said, we trade multiple strategies for an abundance of opportunities which we investigate for best probability then decide which trade to enter. 

Abundance is critical. If you’re not getting plenty of quality trade setups you might be tempted to enter trades that you shouldn’t take. When you have choices, then you c...

Today’s Best S&P Futures Turning Points: Nothing tradeable today.  

Tuesday’s results: Price whipsawed the volume level stopping out both trades.  

The World Index: (+100/-100) drops from -21 to -43 with most major world markets Bearish on increasing volatility. 

Catalysts: Richmond MFG Index @ 10:00. Fed’s Williams @ 13:45. Beige Book @ 14:00. 

Quick Tip: Waiting 

I grew up in Michigan. A local saying about the weather was “Wait a day, it’ll change.” Now I live in Florida where during the rainy season you can drop your waiting time to an hour!

Markets are very similar. They trend up or down and then move sideways. Back and forth. Patience pays off and impulsivity gets hammered. 

This cyclicality applies to your strategy performance too. You’ll have winning streaks, flat periods, and losing streaks. Given this reality you need rules to manage each condition to prosper, even survive. 

Here’s an example: The volume levels suggested here are one component of an overall strategy th...

Today’s Best S&P Futures Turning Points: Buy 5322.75 stop 5319.25. Short 5320.00 stop 5334.50 if price drops below and retraces to entry. 

Friday’s results: Neither trade triggered. 

The World Index: (+100/-100) rises from -57 to -21 with all major world markets mildly Bearish or neutral on low volatility. 

Catalysts: Home Price Index @ 9:00. Fed’s Kashkari @ 9:55. Consumer Confidence @ 10:00. Dallas Fed MFG Index @ 10:30. Fed’s Cook & Daly @ 13:05. 

Quick Tip: Finding Edge

Simply put, Edge is probable advantage. It’s what the casinos have. The gambler can win any given day, but the casino will win every day. 

Edge can be mysterious to many traders. How do you find edge? Research is the best start but what are you looking for to validate it? 

Here’s a simple formula to calibrate and validate the edge in any trading strategy. 

1. Look at as many trade setups as you can find going back in time as far as you have time to do so. 

2. From the entry price, measure the MOST price wen...

Today’s Best S&P Futures Turning Points: Buy 5343.00 stop 5339.25. Short 5340.00 stop 5343.75 if price drops below and retraces up to entry. 

Wednesday’s results: Buying 5321.50 was filtered out during the FOMC Minutes volatility. 

The World Index: (+100/-100) rises from -37 to +7 with sentiment mixed, firmly Bearish in Shanghai & HK, Bullish elsewhere. 

Catalysts: Jobless Claims @ 8:30. Flash MFG & Services PMI @ 9:45. New Home Sales @ 10:00. Fed’s Bostic @ 15:00. 

Quick Tip: After Losing 

What do you do after a losing trade? 

There’s statistical and observable evidence that the number of winning traders is much smaller than the number of mediocre, losing, and failed traders. 

If that’s the case, then the best lesson you could learn and the surest route to success in trading is to emulate the winners. Copy their successful actions. 

Setting aside their actual strategy rules, which you may never be privy to, think about how they handle losses. They have them, too. The answer is...

Today’s Best S&P Futures Turning Points: Buy 5321.50 stop 5317.50. Short 5318.25 stop 5322.25 if price drops below and retraces up to entry. 

Tuesday’s results: No trade triggered.  

The World Index: (+100/-100) rises from -57 to -37 with all major world markets modestly Bearish except Shanghai. 

Catalysts: Fed’s Goolsbee @ 9:40. Existing Home Sales @ 10:00. Crude Oil Inventories @ 10:30. FOMC minutes release @ 14:00. NVDA earnings @ 16:20. 

Quick Tip: Bank It

How traders approach their craft is very individual. Three traders using the same strategy may have different beliefs that vary their results, yet they follow the same entry and exit rules. 

Imagine your strategy caught a buy early in the day that ran for 30 S&P points.  That’s a big win for a day trader. Would you bank your day or keep trading? This decision has nothing to do with the strategy rules. It’s personal money and time management. 

One trader banks the day and decides to research other strategies. 

Another trad...