Wednesday’s Blog Results: Your suggested buy at 4742.50 was only good for a 6.75-point scalp BUT you shouldn’t have taken the trade.
Today’s Trading Tip: Stand back.
Traditional work, your job, your career, your profession, all make becoming a winning trader difficult. Not because of the time devotion, because they instill a belief that is NOT helpful in trading.
What is it? Doing something. Can you imagine if you were caught doing nothing and told the boss “Now is not a good time to be working on this.” Or “Thursdays are difficult days to get anything done, so I’m going to loaf.”
In trading NOT entering a trade is not only OK it’s smart. There are times when the probability of success is low. Don’t trade. Unlike your job, doing nothing is completely acceptable.
Look at yesterday. The FOMC Minutes came out at 2PM ET and the volatility soared. The initial reaction was a 13-point bounce higher. Two minutes later price dropped 70+ points to the close of the session.
Should you never trade major news announcements like this? Not necessarily. It really depends on the strategy you trade. A strong move down yesterday was sheer bliss for a trendline break strategy. Not so good for picking reversals on volume levels. Trading multiple strategies is the answer but knowing when to trade which one is critically important. The best way to know that is documentation. Gather all the evidence you can and trade with the probabilities.
Today’s Best S&P Futures Turning Points:
Short Level: Sell 4777.00 stop 4781.75.
Long Level: Buy 4644.75 stop 4639.75.
Happy New Year!
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