The Daily Market Forecast... Lesson Day
New: Futures Trading Daily Lessons & Levels Blog
Today’s Lesson: How to exit. New traders are usually focused on entry signals. Clearly, we don’t want to enter randomly but the more important decision you have is WHEN and HOW to exit. That’s where the money is made or lost.
The worst situation to be in is having one contract. Fortunately, with so many micro contracts to select from even smaller account holders can trade multiples. This gives you the flexibility to “scale out” of the trade one contract (or more) at a time.
We typically take one quick profit on every trade. It’s called a “risk management profit target.” It gives you a little win, reduces your risk substantially and leaves you with more contracts to make a better return on.
The remainder are aiming for “pre-planned profit targets.” Instead of deciding when to exit while in a potentially emotional state, it’s better to select those exits in advance. Chart features, market geometry, technical indicators and more are all viable places where price may stall or turn against you. Take a few minutes before your entry gets filled and visualize where you’ll exit and place those orders. You can always adjust for changing market conditions but starting with a decision and “known” reward/risk is important.
For Mon 211004 (Plenty can change by the open, be aware.)
Globex Review: Volume Profile during the Globex is hot. One takeable winner that ran for 24.50 points to the next level, entered at 8:40 and closed during your dreams. 😊
Day Session Analysis: Sentiment is mixed. Stats suggest longs will perform better. Taking trades in either direction. Monday (both sessions combined) garnered 27% of all the gains over the past 5 years in dollars. Reversals and Breakouts are about even. Trading ES/CL/GC using BB Rev with MORE new filters (download the new Edge). Looking for SPXW credit spread opportunities once the pace of the day is established.
S&P 500 Futures CPL: 4346.50/4352.75. We’re trading BELOW the CPL (short edge below, long edge above) and WITHIN the equilibrium 4325.50/4328.75 (open below = short edge, open above = long edge).
The World Index: (+100/-100) LIFTS from -50 to -25 in a world of mixed sentiment, bearish leaning (longs outperform shorts). China closed for holiday.
Catalysts: Nothing on the economic calendar of interest. Same old stuff… debt ceiling, Evergrande, price of oil.
Trends: 60 min DOWN, daily DOWN (longs outperform shorts).
Inside day: Win/Stop% about the same, longs delivered 40% more profit. Opening around -0.40%. $TRIN XMA 0.87. Long term outlook is returning to “hold.”
Globex: The range of 47 (possibly wider by the open) suggests a day session range around 61 points on a RISING ATR of 60.73. Prior forecast around 65 points, actual 88.75
Trade Well,
Mike Siewruk
P.S. For a free “mini-course” packed full of lessons on HOW to trade the Blog… Watch this video.
Your suggested levels didn’t trigger yesterday. The team had more levels to trade and ended the day healthy (+37.75 potential ES points). Even so, we traded multiple strategies and fired on all cylinders! ES added another 34 points, CL contributed $1.29 net, and GC took some back losing 3.00.
Today’s Lesson: Get in early. Trading is usually counter-intuitive. What you think should work, doesn’t.
Consider the entry on the trade above. The suggested short was 4436.50 with a stop 5.75 points above. Price moved against by only 1 point.
Some traders may not want to risk 5.75 points. The “accepted” solution I’ve heard too many times is this: move your entry deeper into the price level. Wrong.
Hard evidence from over 9000 trade setups says you don’t want to miss those quick price turns. 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. Morning Edition: This will be updated today (Sunday if today is Friday) at 17:30 for the Globex session.
For Mon 210927 (Plenty can change by the open, be aware.
Globex Review: One takeable trade that ran for 14.25 points to the next level and that was complete by 9 PM ET.
Day Session Analysis: Stats are mixed. No clear catalyst. Thinking range-bound. Trading either direction. Monday (both sessions combined) garnered 27% of all the gains over the past 5 years in dollars. Reversals and Breakouts are about even. Trading ES/CL/GC using BB Rev with new filters. Looking at SPXW credit spreads on a likely range-bound day.
S&P 500 Futures CPL: 4435/4442. We’re trading WITHIN the CPL (short edge below, long edge above) and JUST ABOVE the equilibrium 4436.50/4438.75 (open below = short edge, open above = long edge).
The World Index: (+100/-100) LIFTS from -29 to +21 in a mildly bullish world (shorts outperform longs).
Catalysts: Durable Goods @ 8:30. Looks like the market didn’t like the German election results (price peaked and dropped hard from the Euro open).
Trends: 60 min DOWN, daily UP (longs outperform shorts).
High outside day: Win/Stop% about the same, shorts delivered 20% more profit. Opening near flat (no edge). $TRIN XMA dips to 0.92 (long term outlook: stay long).
Globex: The range of 34.25 (possibly wider by the open) suggests a day session range around 50 points on a FALLING ATR of 53.77. Prior forecast around 51 points, actual 35.25.
Trade Well,
Mike Siewruk
P.S. For a free “mini-course” packed full of lessons on HOW to trade the Blog… Watch this video.