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...

Wednesday’s Results: Bulls win the inflation debate, levels were far apart expecting extreme volatility but that only happened for 15 minutes, melt up after that.  

Quick Tip: A New View

If you were a professional athlete, actor, musician, or public speaker you would watch recordings of your performances to improve your skills. Without doing so you might never know what to change.

Someone may tell you what to change, but there is something humbling about reading, watching, or listening to your blunders. It sinks in quicker!

Trading is also considered a performance profession. Just like athletes, your performance changes from day to day. Great traders handle these ups and downs with persistence and resilience gleaned from review.

Start recording your trading sessions. Use a journal if your trading style is not short term. Be detailed in describing the trades including your thoughts, mistakes, and successes.

Day traders can...

Tuesday’s Results: : The market churned sideways awaiting today’s CPI news. No trades triggered. 

Quick Tip: Ask Yourself

Today is a big day for the stock market. The CPI (inflation) results for July come out at 8:30 ET. We’ve been in a trading range for several days. It’s almost a certainty price will break out into a trend. Up or down.

You should be asking yourself how you’re going to respond. Being proactive and planning the details will get you the calm confidence to execute with no doubt. What will you do if it soars? How about if it crashes? What if it whipsaws? 

Are you hearing crickets up there? Don’t know what to do? Can’t decide? Don’t know if your decision will be the right one? 

Dr. Brett Steenbarger, trader psychologist to the stars and author of Enhancing Trader Performance said this:

“There is no question in my mind that, if I were to start trading...

Monday’s Results: The suggested buy at 4137.25 offered a 16-point bounce with only 1.5-points adverse.

Quick Tip: How Much is Enough?

Entries are important but all the money is made (or lost) on the exit. Arguably, there is some “art” along with the science to exiting. 

The culprit is hindsight. You take your profit and then see how much you didn’t get. You stay in the next trade looking for a runner and it reverses and stops you out after you had a sizable open profit. Frustrating results from unskilled trading. 

In “The Disciplined Trader” by the late Mark Douglas, he identifies nine critical trading skills. 

#6 - Learning how to let the market tell you how much is enough, instead of assessing the potential from your personal value system of how much is enough. 

This seems simple but isn’t necessarily so. You can look at the charts and target a reversal pattern or level for your...

Friday’s Results: The suggested buy at 4108.00 caught the low of the session and ran for 43 points. The high of the market was another volume level (unpublished here). 

Quick Tip: Volume Leads Price

For as complex and chaotic as the markets are, technical traders only have 3 variables to analyze. Price, volume, and time. Most technical traders agree that volume LEADS price. 

Price moving up with volume increasing is very bullish. It’s hard evidence that plenty of buying interest is happening. Conversely, price moving up with decreasing volume is not as bullish. 

Price moving down with volume increasing is very bearish. More hard evidence. Conversely, price moving down with decreasing volume is not as bearish. 

How do you use this data? Entries AND exits!

If you’re a breakout trader and volume is surging at your entry ...