Tuesday’s Best S&P Turning Points Results: The suggested buy @ 4038.00 was only good for a quick 6-point bounce. 

Quick Tip: Target Optimization

Yesterday you learned about the ratio between the Maximum Favorable Excursion (MFE) and Maximum Adverse Excursion (MAE). The higher the ratio the better. 

Yesterday’s suggested buy only offered 6.25 points before reversing. If your target was greater than that, you stopped out. Here’s how knowing the historical MFE for every individual trade your strategy set up, not just the average MFE (for the ratio mentioned above), will be very helpful. 

Let’s say you have collected MFE on hundreds of trades. You didn’t need to take the trades, they just needed to fit your strategy rule set. Sort the data by MFE, high to low. Now you can ask, “What percentage of the time does price go how far?”

Now you can assign targets to scale out of your winning...

Monday’s Best S&P Turning Points Results: The suggested short @ 4049.75 was a 32.75-point runner. What you didn’t know was the opposing volume level (unpublished here) was a buy @ 4106.00. That runner, selling the morning top, came 2.75-points from 4106.00 and ran all the way back to 4049.75. Enough of the time, volume levels work just fine! Read the P.S. and get involved!

Quick Tip: Calibrating Edge

Every trader and any worthwhile educator of traders talks about edge. It’s what the casinos have. You can win any given day, but they will win every day. Edge is advantage. 

Edge is also 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...

Friday’s Best S&P Turning Points Results: No suggestions were given for Volume Profile with the expected (and arrived) volatility. Trend was the BIG winner from our multi-strat trading room. 

The World Sentiment Index: (+100/-100) PLUMMETS from -7 to -79 with all major world markets bearish with spiking volatility. Expecting a wide range day with more downside trading than upside: This index at -79 historically moves -40 points average from open to low, +31 points average from open to high.

Catalysts: Nothing on the economic calendar. Powell confirmed the latest up move as a bear market rally. Worldwide we’re heading down.  

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

Sell 4049.75 stop 4055.25.

Buy 3982.00 stop 3976.25. 

Trade Fearlessly,

Mike Siewruk 

P.S. Multiple strategies, software tools, teammates, and coaching. Learn why you should join...

Thursday’s Best S&P Turning Points Results: The short @ 4196.75 failed but triggered 3 minutes to the close (filtered out based on time). 

Quick Tip: In Your Head

Yesterday I shared a quote from Curtis Faith in his book “Way of the Turtle,” because Curtis was the most successful of the legendary Turtle Traders, and I re-read his book recently. 

BTW, Curtis was chosen to learn to trade the “Turtle” way at 19 years old and excelled to #1 amongst his peers. I don’t know Curtis personally but based on his success, he KNOWS trading. 

In the bibliography of the book Curtis gives his recommended reading list. 25 books in total. Can you guess what aspect of trading was titled in 12 of those books?

Psychology. 

‘Nuff said. 

If you want the tools and techniques to change your behavior and catapult your trading results, click here for details. 

The World Sentiment Index: (+100/-100)...

Wednesday’s Best S&P Turning Points Results: Another narrow range day when neither trade triggered. 

Quick Tip: Outcome Bias

Imagine this: your strategy has a track record that while not proven to repeat in the future, is statistically sound historically. No curve fitting. Simple, logical rules that make sense. 

You’re trading it and getting great results. Some days the strategy performs better than you, other days you do a little better. Expected. We’re human and we let discretion slip into our trading occasionally.

When you started trading this strategy you were a fearful of it not working. You overcame that fear by starting with very small risk. As you started winning more often and growing your account you felt fearless entering your first few trades every day. 

On days when you started losing you quit after a few losses. On days when you started winning you...

Tuesday’s Best S&P Turning Points Results: Neither trade triggered. 

Quick Tip: Market Diversification

You know market conditions change. Hopefully you’ve perfected a few different strategies that align with the different Market States (trend, breakout, reversal, spread, etc.)

One of the most effective ways to improve your performance now is to trade a diverse range of markets. Include as many as are affordable in your portfolio given your account size. You certainly won’t trade every signal so make your first pre-trade decision in your plan “Market Selection.” 

Here’s an example: Our trading room currently focuses on the S&P, oil & gold futures. We’re expanding this portfolio gradually. Lately, gold has been the laggard in range and return. The risk is less, but the rewards have been as well. If you are more conservative you’d select gold. If you were more aggressive you’d select the...

Monday’s Results: The suggested buy @ 4145.00 stopped out. 

Quick Tip: Market States

You hear and read a lot about trading in harmony with the trend in a larger timeframe. That’s only half your concern, though. The other variable you should consider is volatility. 

Combining trend and volatility you arrive at the 4 Market States: 

1 - Trend with low volatility.

2 - Trend with high volatility.

3 - Ranging with low volatility.

4 - Ranging with high volatility. 

Few, if any, strategies work well in all the Market States. If you’re struggling to get consistency a great exercise is to review the Market States during all your prior trades. You could find a filter to improve performance. If you do, you’ll be exercising extreme patience during the adverse Market State until you develop strategies for ALL the Market States. 

Better yet, join our team risk-free. We trade multiple complementary...

Wednesday’s Results: Neither suggested level triggered.   

Quick Tip:  Your Jobs

As a trader you have different jobs with different skill sets that you may not realize. 

You should manage your trading like a business. Even if you’re employed, think of it as a side business.

You’re unlikely to have employees and that means you need to perform different jobs to be successful. You’re the CEO, CFO, and Trader. 

The CEO creates the vision then ensures it becomes a reality… the AUTHOR of the trading plan, documentation, and review processes. This job is not mired in day-to-day performance. Your focus is on long term growth and goal attainment. Spend some time developing a written vision statement and goals (within your trade plan). Read them frequently when you’re wearing your CEO “hat” and especially when you’re facing performance challenges. 

The CFO manages the...

Tuesday’s Results: Neither suggested level triggered.   

Quick Tip: Practice NO   

Your review and documentation of all your trade setups is priceless. As you accumulate data you can improve your “edge” by finding situations when the strategy doesn’t work as well. These are filtered out trades. You’re saying “NO” at entry time. 

Here’s an example: Our Volume Profile strategy has three different entry/exit rule sets tuned to specific market conditions.

Sometimes the market is noisy, and you need to give the trade more room to move. Other times you’ll want tight stops and accept more breakeven trades. 

Yesterday’s action teed up 4 trades for the team during the day session. Had you taken them all you would be positive 7.25 S&P points.

Following the currently favored entry/exit rules, you “passed” on two trades and ended the day +22.25 S&P...

Monday’s Results: The suggested short at 4292.50 only offered 4.75 points.  

Quick Tip: How Many?   

Every trader evolves their style over time. I recall one excellent trader I worked with who only traded ONE asset. He claimed the focus on one stock gave him considerable edge understanding how the market makers manipulated price. It worked for him. Fair enough. 

Most traders wouldn’t think of limiting themselves to one asset. Not enough opportunity! Too much patience required when volatility dries up. 

Then again, following too many assets is difficult and possibly detrimental. 

If you’re reviewing and documenting your trade results you will quickly find out how many you should be following and trading.

The futures market offers many contracts to choose from, but they don’t all trade the same way. There are differences based on seasonality, time of day, etc. 

Invest the time in...