Yesterday’s results: Neither trade idea triggered.

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

The World Index: (+100/-100) jumps from +50 to +71 with all major world markets Bullish. 

Catalysts: International Trade Balance @ 8:30. S&P Final Services PMI @ 9:45. ISM Services PMI @ 10:00. 10-year Bond Auction @ 13:00. Election Day. 

Important: Check your broker’s policy on day-trading margin today. TradeStation requires full margin for the next 3 days! What does that tell you about volatility expectations? 

Quick Tip: Losing Enough? 

A popular formula for determining your risk on any given trade is the Fixed Percentage Rule. You pick a percentage, usually 2% or less, of your trading account and that is the most you can risk on each trade.  

It works great because as your account grows your risk can increase giving you the opportunity for greater...

Yesterday’s results: No trades triggered.

Today’s Best S&P Futures Turning Points: Buy 5861.25 stop 5858.25. Short 5859.00 stop 5862.00 if price retraces up from below.  

The World Index: (+100/-100) falls from +21 to -29 with mixed sentiment, China/HK down firmly. 

Catalysts: Empire State MFG Index @ 8:30. Fed’s Daly @ 11:30, Kugler @ 13:00. Contrarian Alert: VIX near 20 is unusual at new highs. 

Quick Tip: VIX Explained 

Have you ever heard of the stock market's “fear gauge”? That’s a nickname for the VIX, or Volatility Index. The VIX helps us understand how much uncertainty or risk there is in the market at any given time. 

It measures how volatile the stock market is expected to be over the next 30 days. In other words, it shows how much the prices of stocks might swing up or down. The more the market is expected to move, the higher the VIX goes. 

It's often called the "fear...

Yesterday’s results: Buying 5745.00 stopped out. The short idea didn’t trigger. 

Today’s Best S&P Futures Turning Points: Short 5797.75 stop 5801.25. Buy 5800.50 stop 5797.00 if price retraces from above. 

The World Index: (+100/-100) drops from +33 to -36 with extreme sentiment differences on higher volatility. For example, HK -9.4%, Shanghai +5.9%. 

Catalysts: Trade Balance @ 8:30. Fed’s Bostic @ 12:45, Collins @ 16:00, Jefferson @ 19:00. 

Quick Tip: Black Swans

Popularized by Nassim Taleb in the book of the same name, Black Swan simply means a rare, unpredictable, and high impact event. 

Hurricane Milton is a Black Swan. It is the first hurricane in the Gulf of Mexico to travel from west to east in the last 100 years. My hometown for most of my life was the Tampa Bay area. If Milton continues on the forecast track he will make landfall near Tampa Bay, which could be devastating. Obviously, I’m...

Friday’s results: No trades suggested. 

Today’s Best S&P Futures Turning Points: Short 5808.00 stop 5812.75. Buy 5812.00 stop 5807.25 if price retraces from above. 

The World Index: (+100/-100) plummets from +57 to -14 with China wildly Bullish and the remaining major world markets somewhat Bearish. 

Catalysts: Fed’s Bowman @ 8:50 and Powell @13:55. Chicago PMI @ 9:45. Dallas Fed MFG Index @10:30. 

Quick Tip: Ratio Exits

Our volume-at-price strategy usually performs better in the Globex session. We know this from thousands of documented trades. The challenge for most of us is we’re sleeping! 

Setting a planned entry before bedtime is no problem. Optimizing the exit is the tricky part. 

One common exit is the trailing stop using initial risk. The downside is price can get spiky taking you out of what became a great trade. 

One great trader on our team uses what I’ll call the Ratio Exit. 

For...

Yesterday’s results: Neither trade idea triggered. 

Today’s Best S&P Futures Turning Points: Buy 5422.25 stop 5416.50. Short 5581.25 stop 5584.75.

The World Index: (+100/-100) remains at -7 with sentiment mixed and volatility low. 

Catalysts: Fed’s Barr @ 10:00, Bowman @ 12:15. Waiting for CPI tomorrow.  

Quick Tip: Moving Stops

The stop loss placement decision is made before entry. It’s at a price where your choice of direction is proven wrong. 

You can always tighten the stop while the price is moving in your direction to minimize the risk. No one will tell you to increase your risk by moving the stop farther out if the price is going against you. Another alternative is to not move the stop at all and manage out of the trade from the profit target side. 

I know successful traders that have opposing views on this subject. The correct answer is not simple, though. You need to...

Today’s Best S&P Futures Turning Points: This strategy remains on hold but is improving.

The World Index: (+100/-100) jumps from +29 to +64 with all major world markets solidly Bullish. 

Catalysts: PCE Price Index @ 8:30. Chicago PMI @ 9:45. UofM Revised Consumer Sentiment @ 10:00. 

Welcome back to Poker Week! If you haven’t read the last four blog posts now is a great time to do so. All week we’re exploring poker lessons that are also invaluable for traders. Enjoy!

Lesson #5: Maximizing Wins

In poker, as in trading, one universally agreed upon tenet is “minimize your losses and maximize your gains.” But what is the proper way to achieve that outcome?

Imagine you’re playing poker, and you get a powerful hand. Your reaction should be to raise the bet. Novice players make the mistake of slow betting the hand instead of raising. They want to keep players in the hand to maximize the pot and their...

Today’s Best S&P Futures Turning Points: This strategy remains on hold but is rapidly improving. Stay tuned. 

The World Index: (+100/-100) rises from +7 to +14 with sentiment mixed and volatility low.

Catalysts: CPI @ 8:30. Crude Oil Inventories @ 10:30.   

Quick Tip: Re-Starting

When you start trading you’re obviously attracted to the potential gains and entrepreneurial freedom from traditional work. But trading is not easy to master and losing in the beginning is normal. This is why learning to trade in simulation mode makes sense. 

Of course, simulated trading can only teach you execution. It doesn’t address the psychological challenges of winning, losing, being right, and being wrong. Still, it’s the best “first step.”

Fast forward to once you’re a profitable trader. You’ve experienced winning and losing but you’ve built the confidence to manage the losing streaks because they’ve...

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

Friday’s results: This strategy is on hold... but is improving and likely out of the drawdown soon.

The World Index: (+100/-100) plummets from +36 to -36 with most major world markets Bearish. The U.S. deviates with a strong bullish Globex session so far. 

Catalysts: Empire State MFG Index @ 8:30. Fed’s Powell @ 12:00, Daly @ 4:35. Goldman Sachs gapping up on earnings. Trump presidency looks more likely. 

Quick Tip: Excursions

I’ve been asked a few times… “Why do you document the trade results with the maximum that price moved, since you can’t exit there anyway?”

Two data points you should keep for every trade, taken in real time or not, are Maximum Favorable Excursion (MFE, how far price went in your favor) and Maximum Adverse Excursion (MAE, how far price went against you). 

As your data set...