Trade Aptitude

day trading futures risk management trade planning May 29, 2024

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...

Trade Aptitude

risk management trade planning May 20, 2024

Today’s Best S&P Futures Turning Points: : Buy 5321.50 stop 5317.50. No short suggestion today.

Friday’s results: Neither trade triggered.

The World Index: (+100/-100) soars from -7 to +50 with all major world markets Bullish.

Catalysts: Fed Speakers: Bostic @ 7:30 & 8:45, Waller & Barr @ 9:00, Jefferson @ 10:30, Mester @14:00.

Quick Tip: Blackjack

Much has been said about the similarities between trading and gambling. Much is true. All is not. A fabulous book you should read about this topic is A Man for All Markets by Edward O. Thorp, an accomplished mathematician, author of Beat the Dealer, and acclaimed hedge fund manager.

When Thorp tested his blackjack card counting system in the real world, financed by two wealthy (and greedy) millionaire businessmen, he uncovered a significant “edge” that you can and should apply to your trading.

His backers wanted...

Trade Aptitude

risk management trade planning May 16, 2024

Today’s Best S&P Futures Turning Points: : Buy 5327.75 stop 5322.00. Blue skies above, no short levels.

Wednesday’s results: The short at 5296.25 was filtered out during the CPI release volatility.

The World Index: (+100/-100) rises from -7 to +14 with Asia Bullish and the western world mixed.

Catalysts: Jobless Claims, Philly Fed MFG Index, Housing Starts/Building Permits, Import/Export Prices @ 8:30. Industrial Production @ 9:15. Fed Speakers today: Barkin & Barr @ 10:00, Harker @ 10:30, Mester @ 12:00, Bostic @ 15:50.

Quick Tip: Confirmation

Here’s a great quote from Jesse Livermore that deserves your attention, “Do not anticipate and move without market confirmation—being a little late in your trade is your insurance that you are right or wrong."

In our effort to succeed we can devote too much effort to predicting the future. The problem is that our predictions are correct just enough of...

Trade Aptitude

day trading futures risk management May 15, 2024

Today’s Best S&P Futures Turning Points: : Buy 5248.75 stop 5244.75. Short 5296.25 stop 5300.75 (filtered out during CPI release due to potential volatility).

Tuesday’s results: The buy at 5231.25 was filtered out during the PPI release volatility.

The World Index: (+100/-100) remains at -7 for the third day in a row with sentiment mixed on continued low volatility.

Catalysts: CPI, Retail Sales, Empire State MFG Index @ 8:30. Housing Market Index @ 10:00. Crude Oil Inventories @ 10:30. Fed’s Kashkari @ 12:00 and Bowman @ 15:20.

Quick Tip: Why Day Trade?

If you have a long-only portfolio, IRA, and/or 401-K you’re probably happy with your 2024 performance so far. You’re also likely concerned about how much higher the market will go!

The adage “Sell in May and go away” doesn’t work out every year, but there is the possibility. Couple the time of year...

Trade Aptitude

risk management trade planning May 13, 2024

Today’s Best S&P Futures Turning Points: Buy 5231.25 stop 5227.25. Short 5296.25 stop 5300.75.

Friday’s results: Neither trade suggestion triggered. The levels remain on the chart.

The World Index: (+100/-100) plummets from +50 to -7 with sentiment mixed on very low volatility.

Catalysts: Fed’s Jefferson & Mester @ 9:00. NY Fed Inflation Expectations @ 11:00.

Quick Tip: Big Risk Defined

Big risk is not in the trade itself. You have a stop loss to control that. Big risk is in the losing streak.

Billionaire hedge fund founder Bruce Kovner said “Novice traders trade 5 to 10 times too big. They are taking 5 to 10% risks on a trade they should be taking 1 to 2 percent risks.”

The key is to not apply the percentage to the price of the asset but apply it to your risk capital. Simple math. If your risk capital is $10,000, you should risk no more than $100 to $200 on...

Trade Aptitude

risk management technical analysis trade planning May 08, 2024

Today’s Best S&P Futures Turning Points: Buy 5185.25 stop 5181.75. Short 5249.50 stop 5253.50.

Tuesday’s results: Neither trade triggered.

The World Index: (+100/-100) drops from +29 to -7 with Asia Bearish and the western world mildly Bullish.

Catalysts: Crude Inventories @ 10:30. Fed Speakers: Jefferson @ 11:00, Collins @ 11:45, Cook @ 13:30. 10-Year Note Auction @ 13:00.

Quick Tip: Fractals

One common rule in many trading strategies is to honor the trend from a higher time frame. If you’re day-trading a 5-minute chart, consider the 30-minute trend. If you’re swing trading a 60-minute chart, consider the daily trend.

There is more to be gained from this multiple time frame analysis.

Markets are fractal, meaning the price patterns on the chart repeat themselves in different time intervals. With this knowledge, here’s some ideas for gaining edge:

1. Entries...

Trade Aptitude

psychology risk management trade planning Apr 30, 2024

Today’s Best S&P Futures Turning Points: Buy 5082.75 stop 5078.25. Short 5176.00 stop 5181.75.

Monday’s results: Neither trade setup triggered.

The World Index: (+100/-100) plummets from +50 to -7 with mixed sentiment and lower volatility.

Catalysts: Employment Cost Index @ 8:30. Housing Price Index @ 9:00. Chicago PMI @ 9:45. Consumer Confidence @ 10:00. AMZN/AMD earnings after the close. Waiting on FOMC.

Quick Tip: Fix FOMO

Fear Of Missing Out (FOMO) in trading is the anxiety from the thought that others are winning while you’re on the sidelines.

While your trade plan has entry rules to follow that should eliminate FOMO, it’s hard not to feel it when an asset or the market is soaring or plunging and you’re idle.

FOMO breeds impulsivity and that usually means extra risk you shouldn’t accept.

Solve this by having an abundance mentality....

Trade Aptitude

personal development psychology risk management Apr 26, 2024

Today’s Best S&P Futures Turning Points: Buy 5082.75 stop 5078.25. Short 5176.00 stop 5181.75. Both are filtered out during the PCE news release @ 8:30 ET

Thursday’s results: The buy at 5048.50 was filtered out due to the GDP release volatility but did bounce for a quick 12-points.

The World Index: (+100/-100) soars from -14 to +64 with all major world markets firmly Bullish.

Catalysts: Core PCE Price Index, Personal Income & Spending @ 8:30. Revised UofM Consumer Sentiment @ 10:00. MSFT & GOOG earnings strong.

Quick Tip: Three Q’s

The best formulas for success are simple.

One of my favorites on decision making, which applies to trading very well, comes from Keith Cunningham, author of The Road Less Stupid:

1 – What is the upside?

2 – What is the downside?

3 – Can I live with the downside?

This ritual can be accomplished instantly with a little practice....

Trade Aptitude

psychology risk management Apr 24, 2024

Today’s Best S&P Futures Turning Points: Buy 5065.50 stop 5061.25. Short 5176.00 stop 5181.75.

Tuesday’s results: Neither trade triggered.

The World Index: (+100/-100) lifts from +43 to +64 with most major world markets Bullish on rising volatility.

Catalysts: Durable Goods @ 8:30. Crude Oil Inventories @ 10:30. 5-Year Treasury Auction @ 13:00. META & IBM earnings after close. TSLA up 12% pre-market.

Quick Tip: Being Wrong

We’re ingrained from childhood to be right. Rewards for being right, punishment for being wrong. In trading this is destructive thinking.

George Soros famously said: "It's not whether you're right or wrong that's important, but how much money you make when you're right and how much you lose when you're wrong."

Of all the words I’ve read about winning and losing, being right or wrong, none sum up the situation better than this quote....

Trade Aptitude

risk management trade planning Apr 10, 2024

Today’s Best S&P Futures Turning Points: Buy 5236.25 stop 5231.50. Short 5296.25 stop 5300.75 (filtered out for CPI announcement).

Tuesday’s results: Buying 5213.00 bounced for 6 points before stopping out one tick from the day session low.

The World Index: (+100/-100) gains from +7 to +21 with most major world markets leaning Bullish on low volatility.

Catalysts: CPI @ 8:30. Fed’s Bowman @ 8:45. Crude Oil Inventories @ 10:30. Fed’s Goolsbee @ 12:45. FOMC Minutes @ 14:00.

Quick Tip: Stop Trading?

hemAll trading strategies have drawdowns (a protracted losing streak). The challenge is trading through them. You can’t stop thinking that it may “never come back” or churn for an extended period. Then you 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...

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