The Daily Market Forecast
Thursday’s Best S&P Turning Points Results: Neither trade suggestion triggered.
Quick Tip: Moving Stops
Unless you’re a prop shop pro scalping with hundreds of contracts you should be placing stop loss orders with every trade. Mental stops mess with your emotions and tie you to the screen.
Once you’re in the trade, the decisions become a) do you move the stop, b) when, c) and to where.
I know successful traders that have opposing views on this subject. 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 his position as price goes in his direction. He trails his stop based on chart features and volatility.
Trader B trades a reversal strategy that anticipates a turning point relatively far away. He understands the spiky nature of his asset and chooses to give it room by not adjusting his stop. He is focused on reaching his target.
Who is correct? Both. For their own style.
What’s correct for you? Now you know it depends on your style and risk tolerance. Which means the answer may vary depending on which strategy you’re trading at the time.
Practice in simulated mode to get a better understanding of what you should be doing. You can also back-test using software like TradeStation.
The World Sentiment Index: (+100/-100) DROPS from -57 to -86 with all major world markets bearish. Historically the market closed higher from the open 54% of the time with up moves 15% larger than down moves.
Catalysts: PMI Composite Flash (80% of the data) @ 9:45. Powell speaks @ 14:00 (opening remarks only, about 5 minutes). Dollar stronger. Recession a given. Cash piling up in retail accounts.
Today’s Best S&P Turning Points (consider wider stops and less size in fast moving markets):
Short 3777.50 stop 3783.50.
Buy 3677.75 stop 3674.00
Trade Fearlessly,
Mike Siewruk
P.S. Multiple strategies, software tools, teammates, and coaching. Learn why you should join our team here. For a personal consultation to assess fit (without selling) email me for an appointment: mike@thedailymarketforecast.