Trade Aptitude

Monday’s Best S&P Turning Points Results: Neither trade suggestion triggered. 

Today’s Best S&P Turning Points (consider wider stops and less size in fast moving markets): 

Short 3843.25 stop 3849.00. Buy 3792.25 stop 3786.50.

The World Sentiment Index: (+100/-100) DROPS from +50 to +7 in a world of mixed sentiment and low volatility. Historically there is no edge with this score. 

Catalysts: Nothing on the economic calendar. Elections and CPI on Thursday are the drivers this week. 

Quick Tip: Fear & Greed Solved?

Money messes with our heads. Until you get a grip on the emotions associated with trading, you’re unlikely to succeed. 

Here’s a viewpoint I learned from one of the all-time great traders, Larry Williams: “More money is lost due to overstaying positions (greed) than exiting due to the fear of losing money.” 

Fear is solved by using stops that lose an amount of money you can accept. Easy enough.

If Larry is correct, and I do believe he is, then greed is solved by pre-planned profit targets. Not so easy! Yes, planning the targets is easy but sticking to them is the challenge. 

You’re long and price is soaring. The candle is becoming extended range. Your target is a few ticks away. What do you really want to do? Take the profit or move your target higher? 

If your strategy has edge and you are confident that following the rules will be profitable then you must follow the rules. It’s our need to be right, our belief that we can do better that limits our profit. 

Here’s a good exercise to prove his point. Determine your targets. Honor them or not but document what happened every time you broke the rule. Get some evidence. 

Trade Fearlessly,

Mike Siewruk

P.S. If your strategies have proven edge and your results are spotty then you need to change your behavior. Click to learn how.