Tuesday’s Results: The buy @ 3891.50 stopped out instantly.
Quick Tip: Artful Exit
Entries for directional trades are easy. You expect price to rise or fall and you have supporting evidence where the entry should be. Not a whole lot to think about.
Exits are another story. While a good entry is important, you make or lose all the money when you exit. If you monitor your open trades you’ll see the open profit or loss moving up and down. Watching money come and go can be an emotional experience, especially for the newer trader. Not good.
You need rules in your trade plan for exits. But rather than have one static rule set you should have multiple exit strategies to use in different market conditions. Once you enter, the market characteristics may change, and your original exit idea is less effective.
Here’s one alternative to consider. If you’re trading multiple strategies (tuned to different...
Friday’s Results: Shorting 3883.25 was only good for a 7.25-point scalp.
Quick Tip: Night Moves
In yesterday’s class “Day Trading for Day Workers” the result of a significant study on market returns done by Haghani, Ragulin & Dewey was shared.
In a nutshell, nearly all the return earned in the S&P over the past 30 years has been made when the market was closed. “Night moves.” The chart above shows the incredible divergence. Even more spectacular, this divergence occurs in many individual stocks, ETFs, even Bitcoin!
Their research concurs with my own, so it was invigorating to find some kindred spirits. For more evidence supporting this phenomenon, and how you can trade it, watch the recording of yesterday’s class. Click here.
Today’s Best S&P Turning Points:
Sell 4015.00 stop 4020.25.
Buy 3891.50 stop 3886.00
P.S. There are several generous memberships offers presented in the recording...
Friday’s Results: The suggested buy @ 3675.50 ran for 36.25 points.
Quick Tip: Visualization
In sports psychology one highly successful technique is positive visualization. In essence, the athlete will vividly imagine and visualize in the mind’s eye the result of what they are about to do.
Golf is an easy example for clarification. Top golfers, coached by sports psychologists are taught an interesting visualization technique. Famous golf coach and psychology professor Dr. Richard Coop instructs this way:
How does this apply to trading? While traders are not in control of the physical outcome like athletes,...
Wednesday’s Results: The suggested buy level at 3648.75 stopped out for a 3.50-point loss (per contract).
Quick Tip: Epictetus
Not being knowledgeable in Greek philosophy I had no idea who Epictetus was. But a famous quote of his is applicable to trading so I’m sharing:
“Men are disturbed, not by the things that happen, but by their opinion of the things that happen.”
What’s your opinion about losing?
Losing is a fact of life. Reacting to it with destructive opinions (beliefs) won’t help. Look at each loser carefully. You either followed the rules precisely or you didn’t. Journal all the trades with the reason why you didn’t. Scan this journal in your morning routine now and then to refresh your memory on what not to do.
Today’s Best S&P Turning Points:
Sell 3755.50 stop 3761.25 (in a fast-moving market consider a stop at 3763.75 and size down).
Buy 3675.50 stop 3679.75.
P.S. Did you know...
Wednesday’s Results: Trading was suspended for FOMC volatility.
Quick Tip: Simple Not Easy
You’ve probably heard the phrase “trading is simple, it’s just not easy.” Indeed, trade plans can be simple to execute but because of our thoughts, emotions, and behaviors we make it hard to follow thus missing the result we want.
Let’s say your “simple” trade rules were based on 1) Determine the big picture trend, 2) Sell rallies in a downtrend on a shorter time interval, 3) Buy dips in an uptrend on a shorter time interval. This is not only simple, but it makes sense. Price moves in waves of impulses and corrections within a trend.
The stock market is in a big picture downtrend. You should have sold yesterday’s rally on the FOMC news. Had you done that you’d be looking at a huge winner as the market is opening down today around 2%! If you didn’t follow your rules, if you didn’t make it “easy,” it was...
Tuesday’s Results: The buy at 3713.75 caught the bottom of the day running 39.75 points before closing the session +26.25.
Quick Tip: FOMC Evidence: S&P
Everyone knows the pattern on FOMC day tends to be range-bound before the announcement and spiky afterward. This should help your trade selection and planning. In fact, if you have solid historical data on your strategy’s performance on FOMC day you might not trade at all. It’s always better to have some probabilities at hand. Keep accurate records whether you took the trades or not.
The announcement releases at 2PM ET. You might think the highest volatility is within the 30-minute interval afterward. Historically, it’s the next 30-minute interval (see second chart).
Direction and move for both intervals: 64% UP, 36% DOWN.
The move widens consistently during the second interval: +29 to +33 points and -17 to -24 points.
Are there any actionable rules you can apply? Maybe so, maybe not. But it’s worth...
Monday’s Results: The buy at 3779.50 stopped out for a 4.25-point loss (per contract).
Quick Tip: Sweet Dreams
The futures market opens at 6:00 PM ET. It’s called the Globex session and it is easier money than the day session. Why? The participants are different. Day session volume brings out all the large lot and algo traders and that creates a noisy effect on price action.
If you’re thinking “I don’t have the time to analyze the market and KNOW where to place those Globex trades” then you’re in luck. We provide our members a complete trading plan for the Globex session every market day around 5:15 PM ET, that’s 45 minutes before the open.
The chart above shows the trade plan levels for last night’s Globex. Five trades, three winners. Decent moves. Join me on Sunday, June 19 @ 5PM ET for my new FREE mini-class “Day Trading for Day Workers.” Click here to register.
Today’s Best S&P Turning Points:
Thursday’s Results: Buying 4416.25 failed the reversal pre-market and failed the breakout during the day session.
Quick Tip: Night School Rocks!
With distance learning common today night school might be losing popularity.
But NOT in the futures, Forex, and crypto markets. These assets trade all night long. You should be planning trades for what is called the Globex (night) session in the futures market. Set and forget while you sleep.
What is equally important about the Globex session is the clues and edge it can give your Day session trading. You should study the Globex data on assets you trade. Patterns and edge will emerge. It may change from time to time so keep your research updated.
Here’s an example: The S&P futures is modestly active in the Globex. The volume is a small fraction of the day session, but enough to analyze. Measure the range of the session (from 6PM to 9:30AM ET). This is a great way to forecast the range of the day session....
Wednesday’s Results: Shorting 4158 offered 52.75 points before closing the day +43 points.
Quick Tip: Courage or Confidence?
You’ve probably experienced that trade setup that just didn’t look or feel right. The rules say “Short” but price is skyrocketing. All you can think about is that stop getting filled instantly and you’re underwater again. Sound familiar?
On the chart above, notice the momentum leading into the suggested short level. The parabolic move up came within ONE TICK of filling your short entry.
Taking that short against that momentum felt wrong. But it wasn’t. Hard evidence over thousands of trades showed the probability was in your favor.
Would it take “courage” to enter that trade? Being courageous sounds too risky to me. I get mental images of danger ahead and I’m supposed to plow right through and prevail… without pain?
Then it retraced several points. Relief! That level may work out!
Tuesday’s Results: The suggested short stopped out.
Quick Tip: Learn to Reframe
Yesterday’s short trade @ 4133.50 stopped out by one tick! Price then plummeted 25+ points. Instead of a solid payday you paid out. Are you upset? Critical? Sad?
Having a positive attitude about your trading is important. Banish those negative thoughts and blame. Reframe the results of a trade like this one to the positive.
Here’s how: Ask yourself, overall did the short level work out? Did the trade run plenty? Was it a great short entry? Yes, yes, yes.
The fact that you missed the run by a small margin doesn’t negate a well-planned trade. Instead of fostering negative emotions about this result focus on the positive. Learn from the failure. What could you do differently the next time? Widen your stops, reduce size if needed. Or accept “subsequent-touch” entries. In this case it worked well.
That’s how a successful trader turns today’s loser into...