Trade Aptitude

Today’s Best S&P Futures Turning Points: Nothing tradeable today.  

Thursday’s results: This strategy is on hold... but is improving and likely out of the drawdown soon.

The World Index: (+100/-100) reverses from +29 to -36 with most major world markets Bearish. 

Catalysts: Fed’s Williams @ 10:40, Bostic @ 13:00. Banks, airlines & exchanges challenged by Crowdstrike/Microsoft bug, apparently fixed. 

Quick Tip: Critical Add-On

If you're trading stocks or options you need to ensure your portfolio is adequately diversified. Hot sectors in the market come and go, sometimes simultaneously. 

This is a critical component of your plan regardless of your entry and exit rules. 

The problem with trying to diversify your picks without a proven method is difficult. You can easily get stuck trading one hot segment of the market (think AI) and ignore others that are primed to explode. 

Our swing trading...

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Trade Aptitude

 

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Trade Aptitude

Today’s Best S&P Futures Turning Points: Nothing tradeable today.  

Monday’s results: This strategy is on hold... but is improving and likely out of the drawdown soon.

The World Index: (+100/-100) eases from -36 to -14 with sentiment mixed with low volatility. 

Catalysts: Retail Sales & Import/Export Prices @ 8:30. Business Inventories & Housing Market Index @ 10:00. Fed’s Kugler @ 14:45.  

Quick Tip: Volatility Stops

Price is either trending or not, volatile or not. Your results will largely depend on the rules you apply to these four Market States. 

In the chart above I’m trading our intraday trend strategy. It performs best when the market is trending on LOW volatility. 

After the open price chopped up and down in a range that was volatile but not extremely so. Once the signal to enter the trend triggered, you’ll notice the volatility slowed considerably. All the candles...

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Trade Aptitude

Today’s Best S&P Futures Turning Points: Nothing tradeable today.  

Friday’s results: This strategy is on hold... but is improving and likely out of the drawdown soon.

The World Index: (+100/-100) plummets from +36 to -36 with most major world markets Bearish. The U.S. deviates with a strong bullish Globex session so far. 

Catalysts: Empire State MFG Index @ 8:30. Fed’s Powell @ 12:00, Daly @ 4:35. Goldman Sachs gapping up on earnings. Trump presidency looks more likely. 

Quick Tip: Excursions

I’ve been asked a few times… “Why do you document the trade results with the maximum that price moved, since you can’t exit there anyway?”

Two data points you should keep for every trade, taken in real time or not, are Maximum Favorable Excursion (MFE, how far price went in your favor) and Maximum Adverse Excursion (MAE, how far price went against you). 

As your data set...

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Trade Aptitude

psychology trade planning Jul 12, 2024

Today’s Best S&P Futures Turning Points: Nothing tradeable today.  

Thursday’s results: This strategy is on hold... but is improving and likely out of the drawdown soon.

The World Index: (+100/-100) eases from +50 to +36 with most major world markets mildly Bullish. 

Catalysts: PPI @ 8:30. UofM Consumer Sentiment @ 10:00. Earnings starts with big banks. 

Quick Tip: Resilience 

Baseball great Harmon Killebrew said, “The most important athletic ability is the talent to comeback from behind.” True in sports, true in business, true in trading. 

The great come-back athletes were different than their peers. They knew there would be setbacks. They thought in advance how to handle them. They didn’t get emotional. They snapped to attention and executed their plan. 

Traders have losing streaks. Can’t avoid them. 

Are you reactive or proactive? What’s your comeback...

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Trade Aptitude

Today’s Best S&P Futures Turning Points: Nothing tradeable today.  

Wednesday’s results: This strategy is on hold... but is improving and likely out of the drawdown soon.

The World Index: (+100/-100) jumps from +21 to +50 with all major world markets Bullish. 

Catalysts: Jobless Claims & CPI @ 8:30. Fed’s Bostic @ 11:15 & Musalem @ 13:00. 30-year bond auction @ 13:00. 

Quick Tip: Defining Trend

“The trend is your friend… until the bend in the end.” 

Most traders agree. But not all traders define trends the same way

Here’s some examples: 

1. Moving average slope.

2. Higher highs, higher lows (up), lower highs, lower lows (down). 

3. Drawing trendlines based on connecting highs (down) and lows (up). 

4. Higher time interval slope. 

5. Basing price pattern breakouts. 

Take your pick. The question is “Does it...

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Trade Aptitude

Today’s Best S&P Futures Turning Points: Nothing tradeable today.  

Tuesday’s results: This strategy is on hold... but is improving and likely out of the drawdown soon.

The World Index: (+100/-100) is stable at +21 in a mildly Bullish, low volatility world. 

Catalysts: Powell @ 10:00. Crude Oil Inventories @ 10:30. 10-y Bond Auction @ 13:00. Fed’s Bowman & Goolsbee @ 14:30. 

Quick Tip: Persistence

Every successful person in trading and in life has gone through barriers and setbacks to achieve their success. Every failure was viewed as a learning experience. 

In trading everyone deals with losing streaks, drawdowns, unfilled winning trades, slippage, internet outages, criticism from family and friends, and more. 

Consider: 

“I have not failed. I have just found 10,000 ways that won’t work.” Thomas Edison

“I have failed again and again throughout my life....

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Trade Aptitude

Today’s Best S&P Futures Turning Points: Nothing tradeable today.  

Monday’s results: This strategy is on hold... but is improving and likely out of the drawdown soon.

The World Index: (+100/-100) improves from -7 to +21 with Asia Bullish and the west mixed.

Catalysts: Powell’s Text ahead of Testimony @ 8:30. Fed’s Barr @ 9:15, Powell & Yellen @ 10:00, Bowman @ 13:30. 

Quick Tip: Catalysts

Whether you’re a day, swing, or position trader one thing that must happen for your trade to really move is a catalyst. This could be news, earnings, economics, and many other events. 

A strong catalyst helps in several ways. Price moves quicker and usually farther than normal. Volume increases for better liquidity. 

Ideally, you’ll be proactive in finding potential catalysts that have not hit the mainstream yet. On our Swing Trading Stock/Options team, we get an early peak by monitoring...

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Trade Aptitude

       
       
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Trade Aptitude

Today’s Best S&P Futures Turning Points: Nothing tradeable today.  

Tuesday’s results: This strategy is on hold... but is improving and likely out of the drawdown soon.

The World Index: (+100/-100) soars from -14 to +57 with all most major world markets very Bullish on rising volatility. 

Catalysts: ADP NFP Change @ 8:15. Jobless Claims & Trade Balance @ 8:30. Services PMI (Final) @ 9:45. ISM Services PMI @ 10:00. Crude Oil Inventories @ 10:30. FOMC Minutes @ 14:00. Futures market closes @ 1:15 ET for the holiday.

Quick Tip: Trend or Reversal?

You might be thinking that trading trends is safer than picking turning points. Many strategies focus on trading in the direction of a larger time frame trend. This makes sense and it generally works well. 

But it’s not necessarily “safer.”  Your initial priority is making sure your trade plan rule set has “edge,” meaning over time...

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