Friday’s Best S&P Turning Points Results: The suggested short level was only good for a 7.25-point scalp. 

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

Short 3966.50 stop 3971.25. Buy 3849.50 stop 3843.75. 

The World Sentiment Index: (+100/-100) SOARS from -64 to zero in a world of mixed sentiment. Historically it’s coin toss where we’ll end up. No edge to report.  

Catalysts: Chicago PMI @ 9:45. Waiting on FOMC Wednesday. 

Quick Tip: Exit Art

In teaching over 4000 traders in the past 13 years I’ve found the most common goal is finding better trade setups. It seems we naturally want to know when, where and with what are we going to get started. Entry rules. 

The fact is that entries are easy to find. Investing much of your research time on finding better entries is not nearly as productive as finding better exits. 

Why? Because you win or lose on the exit you choose. It is the most important rule set in your plan. You should be t...

Thursday’s Best S&P Turning Points Results: Neither suggested level triggered. 

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

Short 3841.00 stop 3846.25. Buy 3723.50 stop 3717.75. 

Quick Tip: Belief #1

Success at trading, at anything, is formulaic. No one stays successful at anything without a proven formula to follow. What’s yours? 

You may think it’s your trade plan. You may think you need the hottest strategies, the best broker, more risk capital, and better sources of information. All that surely helps but the foundation for your success starts within you. It’s your belief. 

Do you honestly believe you can become a top-notch trader? Or are you thinking of giving it a try?

Trying isn’t enough to overcome the challenges of anything worthwhile. It’s a negative belief. Knowing you’ll succeed is a positive belief. 

The glass-half empty trader will think, “I don’t KNOW I’ll be successful, but I’ll try my best.” The glass-half full t...

Wedneday’s Best S&P Turning Points Results: The suggested short @ 3869.50 was only good for a 7.50-point move. The breakout from that level ran for 19.00 points to the next level.  

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

Short 3923.25 stop 3928.25. Buy 3792.25 stop 3787.00

Quick Tip: A Bag Full

Legendary golf coach Harvey Penick wrote in his best-selling Little Red Book that you could build a solid game of golf around ONE CLUB. The 7-iron. Amazing and true. More importantly, his wisdom can be applied to trading. 

Your email, like mine, is probably jammed with dozens of “how to trade” offers every day. Your choices for learning strategies, getting trained, and building your trading skills are endless. In fact, you’re probably CONFUSED. Too many choices leads to indecision. 

If Harvey were coaching you he would probably say “Simplify. Focus. Pick one and MASTER it.” Keep the 7-iron in your bag. Leave ALL the other clubs at home...

Monday’s Best S&P Turning Points Results: :Neither volume level triggered. 

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

Short 3896.00 stop 3901.75. Buy 3719.25 stop 3713.50.

Quick Tip: Move Stop or Not? 

Yesterday you learned how to optimize your stop placement. How about moving it as the trade goes in your direction? 

Never moving your stop is saying market conditions don’t change, which makes no sense at all. 

In our trading room we find that aggressive stop movement is warranted in certain market conditions. Slow stop movement is warranted in other conditions. Let’s define the difference between “aggressive” and “slow” stop movement. 

Using our strategy rules the aggressive exit moves the stop to breakeven for the trade itself after target 1 is filled, and to breakeven for remaining contracts after target 2 is filled. This creates more breakeven trades, and you’ll miss some good runs. The tradeoff is less and smaller losses. 

Friday’s Best S&P Turning Points Results: : The short @ 3731.25 ran for 18.25 points, after getting 51.75 from the prior day’s high-volume level. 

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

Short 3891.00 stop 3896.75. Buy 3702.00 stop 3696.25

Quick Tip: Optimal Stops

Limiting losses is critical for success in trading. Stop Loss orders are one important part of your risk management plan.

Where to place your Stop Loss is a personal matter. One common and sensible place is at the price your trade is proven wrong. 

Here’s how to optimize your Stop Loss placement: Log the MAE (Maximum Adverse Excursion) for every trade setup, whether you took the trade or not. MAE is simply how far against your entry it went before stopping out or hitting your first profit target. 

Obviously, the maximum MAE you’ll have is the stop itself. But on all those winning and breakeven trades there is a number it went against but didn’t reach the stop. This ...

Thursday’s Best S&P Turning Points Results: The short @ 3738.50 only offered 8.75 points. The breakout after failure offered 5.50 points. See chart. 

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

Short 3731.25 stop 3736.00. Buy 3605.00 stop 3599.25.

Quick Tip: Trader’s Fuel

If trading is a performance endeavor (it is) then the committed trader will train for peak performance. Not just practicing trading different markets and strategies in simulation mode, but training physically and mentally. 

On the physical side there is exercise, oxygenation, hydration, and food. Get in the habit before you open your trading platform. 

On the mental side there is discipline, self-control, and confidence. 

Here’s some great news: In Roy Baumeister’s book, Willpower (must read), he references dozens of studies that overwhelmingly prove how to retain the willpower to stay disciplined and in control of your actions… in life, not just trading!

It tu...

Wednesday’s Best S&P Turning Points Results: The suggested buy @ 3693.00 stopped out. 

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

Short 3738.50 stop 3743.25. Buy 3645.00 stop 3639.25.

Quick Tip: More Price Levels

This blog suggests two good setups every day. One long, one short. They are not the only setups that are presented from the volume-at-price analysis. 

Every trading day offers a different “map” of volume levels. They only work for so long, then they’re taken off the chart. That happens when the level is stopped out. Sometimes it occurs on the first touch, like yesterday’s short suggestion. Other times it happens after two, three or more touches. 

Hint: Save the levels that didn’t trigger a trade or stop out. They’re good until they’re violated. 

Looking at yesterday’s chart you’ll see a reversal level that ran for 45.50 points to the next level. Unfortunately, it was not suggested in this blog. Today it is. Sellers are ...

Tuesday’s Best S&P Turning Points Results: Price opened above the suggested short @ 3766.50 and shorting the breakout stopped out. The buy @ 3693.00 never triggered. 

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

Short 3778.00 stop 3783.00. Buy 3693.00 stop 3687.75.

Quick Tip: Day Trades Vary

When you hear “day trading” you may envision a trader glued to an array of monitors buying and selling all day long. While that is certainly a style of day trading it’s not the only style. 

Day trading simply means you are entering and exiting your trade within that day’s session. 

The three basic styles of day trading include scalping, reversal/breakout, and hold-to-close. 

You’re essentially slicing the session into different time frames and expectations.

Scalping is moving in and out of trades for small gains taking very small risk. Strategy edge, attention, and discipline are critical due to the transaction costs (commissions/spread) you’...

Monday’s Best S&P Turning Points Results: Price spiked higher and traded in a range. Neither suggestion triggered. 

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

Short 3766.50 stop 3770.50. Buy 3693.00 stop 3687.75.

Quick Tip: How You Learn

If you’re a regular reader of this blog you know that documentation and review of all your trade setups (taken or not) is essential to improving your results. 

As Brett Steenbarger writes in his book Enhancing Trader Performance, “Trading performance is less a function of WHAT traders learn than of HOW they learn it.” 

Who do you think is going to perform better, the trader who never studies his trade setups or the trader who does? Review is a fabulous learning experience. 

It’s easy to skimp on this work by focusing on just the trades you took or the losers. Your instinct is to understand why you lost. Was it something you did wrong? Could you discover a change to your trade plan that is benefi...

Friday’s Best S&P Turning Points Results: The suggested buy @ 3654.00 ran for 26.50 points with only 2 ticks of adverse move. 

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

Short 3731.75 stop 3737.50. Buy 3516.50 stop 3511.75.

Quick Tip: Next up…

Looking on the chart above at how price is approaching the buy level you might feel like you were stepping in front of a freight train. The plunge was fast with no support to stall it. 

This strategy, volume-at-price, has a history of turning with 2 ticks or less adverse move (like this one) 18% of the time. On the downside, the strategy stops out 32% of the time. That should take care of any fear to enter. 

The winners will require open trade management skill to eke the most out the run, in this case a maximum of 26.50 points. Preset targets, chart features, measured moves, and trailing stops are some of the exit strategies you can use. 

What you need to anticipate is the failed trade. Ar...