Wednesday’s Blog Results: Neither of the suggested levels triggered.

Quick Tip: Journal more.  

Review is an important process to improve your performance (at anything). In trading the dedicated few who review every day start with their charts. The really dedicated trader will keep and review a “thought journal.”

How did you feel that day? What was going through you mind when you were entering trades, exiting trades, winning, losing, making mistakes, being perfect? The list goes on.

Here’s an example, albeit highly personal and not intended as advice, about trading during extreme adversity. You know, like the day after Russia invades Ukraine? War. I thought that kind of thing was over. We grew up. Got educated. Found wisdom. I guess not all of us. ☹

Excuse the digression. In my thought journal I notice that during extreme market moves I get loose with my rules. Feels like greed, thrill, and fear all at once. Knowing this and reviewing these sessions this morning will likely save m...

Tuesday’s Blog Results: The suggested long level at 4285.50 bounced for 10.50 points.

Quick Tip: Scale in.

Consider the entry on the trade above. Price reversed right on the entry. No down money. If you were trying to reduce your risk by moving the entry deeper in the price level you would have missed the winner.

For our Volume Profile strategy, price penetrates the level by a maximum of 1 point 31% of the time before it continues in your desired direction. Think about it. If you’re not entering early you’re giving up 31% of your winning/breakeven trades! It’s way better to move your STOP in from the other side.

Another way to address this is scaling into the trade as it goes against you. Let’s say you’re a 6-contract trader. Entering 3 at the level and the remaining 3 as price moves against you little you’re reducing your risk and increasing your reward. The downside is when price does rocket in your direction you’ll have less size in the trade. Depending on market conditions, you...

Friday’s Blog Results: The suggested buy @ 4360.00 ran for 30.25 points with only two ticks of adverse move.

Quick Tip: Optimizing stops.

Remember this from last issue? “Stops are so easy. Pick your risk number. That gives you position size. Hit enter.”

True enough but there is still the decision as to WHERE the stop should be placed. There are plenty of popular methods that the books, Google or YouTube can teach you. This blog is about OPTIMIZING the stop method you’re already using.

Let’s say your preferred stop method is a fixed number you’re willing to lose. Here’s how to optimize it: Log the MAE (Maximum Adverse Excursion) for every trade setup, whether you took the trade or not. This 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 is important data. Keep...

Thursday’s Blog Results: The long level triggered and popped for 4.25-point scalp. Did you stop out or get dinner money?

Quick Tip: Optimizing targets.

Stops are so easy. Pick your risk number. That gives you position size. Hit enter.

Targets are elusive. The Trading Gods made it that way, I think. And it gets worse if you’re a day trader and watching the chart!

If you ask yourself what would be the best stat to know when you enter a trade, eventually you’ll come to the answer that matters… how far in my direction will it go? This is called Maximum Favorable Excursion (MFE). We’ll never know this but we can use probabilities to help our target placement.

Here’s how: Based on your rules for entry and exit, log the MFE for every trade starting today. You should do this for every trade setup your strategy presents, whether you took the trade or not. If you have the ability to go back and add this to prior trades, spend the whole weekend doing it.

Once you have a sizable dataset (at ...

Wednesday’s Blog Results: The short never triggered and the long was a… problem. Here’s why. The blog arrives around 8AM ET and a whole lot can happen between then and the open. The suggested long was invalid at the open as price dropped well below after the economic news. 

The team had a level that ran for 13.75 points, but price was very spiky all the way, so the gain really depended on how they managed their trailing stop, if any (see chart above).

Quick Tip: Stops… move or not?

You’ve heard both, I’m guessing. I know very successful traders that have opposing views on this subject. It’s no surprise that you heard conflicting advice.

The correct answer is not simple, though. You must take it in context. You need to know their trading style and risk tolerance to truly understand their answer.

Trader A enters momentum moves and adds to her position as price goes in her direction. She trails her stop based on chart features and volatility.

Trader B trades a reversal strategy that...

Tuesday’s Blog Results: Neither suggested level triggered.

Quick Tip: Do something.

Yesterday was “Do nothing” today is “Do something,” what’s going on?

There are many trading styles to choose from. Saying one is the “best” is foolish. It may be the best for someone, but no trading style is best for everyone. While yesterday’s quote came from Jim Rogers suggesting you do nothing between great trades it is his style (very long term). “Doing something” works too.

Out team of traders share best practices for multiple strategies. Volume Profile, Breakouts, Volatility Reversal, Supply/Demand, Directional Options, and Spreads. Not everyone trades all the strategies. You should find the style of trading that resonates with your personality and risk tolerance and stick to it.

But if you have the ability to trade multiple styles (strategies) here are the pros and cons:

Pros:

1. More trading opportunities. When one strategy is waiting for entry, another may be active. This means more effic
...

Monday’s Blog Results: Neither suggested volume level triggered. Team members saw price reverse on a former high-volume level running for 37.25 points.

Quick Tip: Do nothing.

Successful trading skills are very different than how we’ve been conditioned to behave.

Here’s an example via some advice from arguably one of the best traders in history, Jim Rogers.

“I just wait until there is money lying in the corner, and all I have to do is go over there and pick it up. I do nothing in the meantime."

Who was taught this concept growing up? Did Dad ever say, “Do nothing?” Mom? Your boss?

OK… I’m taking literary license here because we all know Jim didn’t vegetate between trades. But what IS important is he didn’t trade. Research? Sure. Study? Yup. Plenty of productive tasks we can do while waiting for the “money lying in the corner.”

Get comfortable with the idea of being a trader who can “not trade.”

Today’s Best S&P Futures Turning Points:

Short Level: Sell 4497.50 stop 4503.25 (sam...

Friday’s Blog Results: The suggested short caught the top of the day session and ran for 41.75 points to the next volume level. Team members knew about the 4174 level and saw that bounce 15.75 points.

Today’s Lesson: F.E.A.R.

Trading breeds emotions. It’s all about the money and most of us have emotional reactions to money. While greed is a killer, fear of loss is also serious problem for unskilled traders.

There is an acronym for “fear” that is important here. F.E.A.R. stands for False Evidence Appearing Real.

The chart above shows a good example of this. Looking at price soaring straight up you might be fearful of taking the suggested short at 4515.75. Your fear would have kept you out of a 41.75-point runner. Not good.

You might be thinking “What’s so false about this rally? It looks very real!”

The fact is strong moves in one direction will usually correct in the opposite direction rather violently. Scan hundreds of charts and see for yourself. The reality behind this phenome...

Thursday’s Blog Results: The CPI report crashed the market and the open was well below the suggested buy level. After all, you get this blog around 8AM ET and lots can happen in the meantime. One of the entry rules we follow is taking breakouts if reversals fail. The chart above shows the result.

Today’s Lesson: Anticipate.

So much of your time is spent waiting for a setup. Be productive and plan your next or other trades. Anticipate.

Looking at the chart above you’ll see the failed short entry. Price moved fast through the volume level and gave you no chance to consider the long breakout in real time. That decision needed to be made in advance.

Another good reason to anticipate is psychological. The short entry failed instantly and that means you lost the maximum you allocated for the trade. Experienced traders are accustomed to losing so there is rarely an emotional reaction. Newer traders will experience angst over the loss and that could affect your decision to keep trading and...

Wednesday’s Blog Results: The suggested short level @ 4575.00 ran for 16.75 points with only 1 tick of adverse move. Don’t you feel more confident when you’re on a winning streak? (Careful…)

Today’s Lesson: Abundance.

Success starts with your orientation toward life. In Larry Wilson’s book, Play to Win: Choosing Growth Over Fear in Work and Life, he reveals the two orientations that you must choose between.

1. Play to win.
2. Playing not to lose.

What’s the difference?

People who have a positive attitude packed with a view of abundant opportunities willing to overcome challenges, grow and risk for gain are “Playing to Win.”

Conversely, people who need to remain in their comfort zone, looking for the “easy way,” have a skeptical, negative attitude and don’t see opportunities clearly are “Playing Not to Lose.”

Successful traders Play to Win. One key component of their formula is the mindset of abundance. If you don’t believe great trades are coming your way all the time then you’ll...