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

The World Index: (+100/-100) remains at +36 with most world markets Bullish.

Catalysts: Nothing on the economic calendar today. Big tech earnings & FOMC later in the week promise action.  

Quick Tip: Market Diversification

Market conditions constantly change. Hopefully you’ve perfected a few different strategies that align with the different Market States (trend and volatility).

One of the most effective ways to improve your performance 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 day trading room currently focuses on the S&P, oil & gold futures markets. We have strategies for each of the market states. At any given time, the individual markets will be trading in or out of sync with the strategies. Last wee...

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

Thursday’s results: This strategy is on hold... but had a superb week of gains and may be back in business on Monday. 

The World Index: (+100/-100) soars from -71 to +36 with all most world markets mildly Bullish on fading volatility. 

Catalysts: PCE/Personal Income @ 8:30. UofM Consumer Sentiment (revised). 

Quick Tip: How Not to Confirm

Many traders use a two-step process to enter their trades. The first is called a “setup.” Certain conditions appear ripe for an entry. The second step is called “confirmation.” The final evidence says pull the trigger. 

Here’s an example: Our trend strategy will signal that a trend is starting based on a chart pattern and current volatility. But that is not when the entry occurs. We wait for confirmation by looking for additional signals, then buy on a retracement to reduce risk and improve price. Simple enough. 

Yesterday a trade signaled and confirmed. It was worth 26 S&P poi...

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

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

The World Index: (+100/-100) dumps from -14 to -64 with all major world markets Bearish on rising volatility. 

Catalysts: MFG & Services Flash PMI @ 9:45. New Home Sales @ 10:00. Crude Inventories @ 10:30. Bearish hangover from GOOG/TSLA earnings. 

Quick Tip: Expensive Options

Traders going long want (need) to buy low and sell high. What may be more important, if available, is a clue that something non-publicly known is about to happen forcing the stock to rise quickly. This might be an earnings release, new product, acquisition, etc. The idea is that smart money knows something the public doesn’t and trades that information. 

Following smart money buys in the options market has edge. You want this. The obvious question is how do you find them? 

Larry McMillan, in his excellent book Options as a Strategic Investm...

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

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

The World Index: (+100/-100) reverses from +36 to -14 with many major world markets motionless. 

Catalysts: Existing Home Sales & Richmond MFG Index @ 10:00. TSLA & AMZN earnings after the close. 

Quick Tip: Strategy Death

This Volume Profile strategy has been in a drawdown for some time. It’s getting painful to document the setups/results every day, but it must be done. Otherwise, how would we know if the strategy is worth trading again? 

What I’ve noticed in the daily review is that the levels are not the main problem. It appears the entry and exit rules are. Fortunately, we have thousands of trades documented, each with 47 data points, and this offers us a significant research opportunity to solve the problem. Stay tuned. 

Why am I sharing this with you? 

Two reasons: 

1) Documenting and reviewing your tradin...

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) reverses from -36 to +36 with most major world markets Bullish. 

Catalysts: Nothing on the economic front. Election views differ but the market is melting up nicely. Earnings season continues. 

Quick Tip: Open Your Mind

Imagine you’re attending a trading conference. You’re one of hundreds of traders watching the presentations, talking to vendors at their booths, looking for some new edge to add to your plan. 

If you asked everyone you met, “What tools do you use to trade?” Here’s what you’d hear: Price action, chart patterns, fundamentals, supply/demand, moving averages, volume, RSI, MACD, CCI, ATR, Stochastics, Bollinger bands, etc. 

The fact is, other than fundamentals, they are all looking at the same core variables; price, time, and volume, simply displayed differently. 

You’d lik...

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

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

The World Index: (+100/-100) reverses from +29 to -36 with most major world markets Bearish. 

Catalysts: Fed’s Williams @ 10:40, Bostic @ 13:00. Banks, airlines & exchanges challenged by Crowdstrike/Microsoft bug, apparently fixed. 

Quick Tip: Critical Add-On

If you're trading stocks or options you need to ensure your portfolio is adequately diversified. Hot sectors in the market come and go, sometimes simultaneously. 

This is a critical component of your plan regardless of your entry and exit rules. 

The problem with trying to diversify your picks without a proven method is difficult. You can easily get stuck trading one hot segment of the market (think AI) and ignore others that are primed to explode. 

Our swing trading strategy uses two unique tools that automatically take diversification into account. And r...

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

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

The World Index: (+100/-100) eases from -36 to -14 with sentiment mixed with low volatility. 

Catalysts: Retail Sales & Import/Export Prices @ 8:30. Business Inventories & Housing Market Index @ 10:00. Fed’s Kugler @ 14:45.  

Quick Tip: Volatility Stops

Price is either trending or not, volatile or not. Your results will largely depend on the rules you apply to these four Market States. 

In the chart above I’m trading our intraday trend strategy. It performs best when the market is trending on LOW volatility. 

After the open price chopped up and down in a range that was volatile but not extremely so. Once the signal to enter the trend triggered, you’ll notice the volatility slowed considerably. All the candles were narrower range and smoothly ascending. You’ll also notice that price moved slower. That trade lasted ...

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 grows you’ll have hard evidence to explore different exit strategies. This review process often uncovers edges in your t...