Tuesday’s Best S&P Turning Points Results: Neither suggested level triggered.
Quick Tip: Futures Fills
Trading futures contracts on the Globex exchange (cmegroup.com) might be the fairest market in the world. Why? Because the orders are time-stamped upon arrival and filled on a first-in first-filled basis. No one gets preference. You’re in a line and it doesn’t matter if you’re a small retail trader or an institution.
Real-world example: Looking at the winning trade from the Globex last night (see chart above) you’ll notice that price turned right on the suggested buy level. Not even one tick adverse move. In fact, checking the volume at price there were 37 micros and 19 minis traded there. That’s worldwide!
Bottom line is you’re not guaranteed a fill. Maybe you were too far back “in the line” and price bid lower, not filling your order....
Monday’s Best S&P Turning Points Results: Neither suggested level triggered.
Quick Tip: Which Market?
The word “market” can mean asset. Stock market. Oil market. Gold market.
It can also mean “condition.” Trending market. Ranging market.
Your strategy rules should be customized to a market condition. No strategy performs well in all market conditions.
It’s commonly said that markets trend around 30% of the time. That leaves 70% for range-bound conditions.
Trending markets offer larger profit opportunities. When you catch a trend it can persist for quite some time. However, you’ll have more losing trades when whipsaws occur.
Range-bound markets offer more winning opportunities. As price moves back and forth from support to resistance you can capture more but smaller winning trades.
Which do you prefer? This is important because your trading style needs to...
Friday’s Best S&P Turning Points Results: Price opened below the first buy level. The second idea @ 3674.25 was good for a 20.50-point run.
Quick Tip: Second Helpings
The charts you see here are based on our proprietary version of volume-at-price. The levels are legacy high volume price ranges. They stay on the chart until violated so some of them are quite old. They still work though.
A great question would be how many entries are you willing to take on the same level? Notice the first touch ran for 20.50 points. The second touch 10.50 points. The third touch 7.50 points. This is an example that shows how orders fill and then they’re gone. No question this price range had plenty of buy orders… for a while.
Historically, the first touch is best and subsequent touches are lower probability. If you’re aggressive and want to enter those subsequent touches, consider reducing your profit...
Thursday’s Best S&P Turning Points Results: The suggested short @ 3790.50 was only good for a 4-point scalp before stopping out.
Quick Tip: Daily Risk
Successful traders manage risk in many ways. The obvious stop loss order is only the beginning of a full-blown risk management plan. Daily risk is part of the plan.
For example, other than the trading floors at institutions with household names, there are plenty of Proprietary Trading businesses. These are privately owned. They hire, train, and finance traders who work for a percentage of the profit.
Consider this: they are betting on inexperienced traders to become profitable in a reasonable amount of time, trading with their capital. Whoa!
How important would risk management be to you if you owned the business? Number 1, for sure.
The Risk Manager can monitor every trader in real time with a dashboard of information showing results....
Wednesday’s Best S&P Turning Points Results: Shorting Buying 3736.75 delivered 55 points to the suggested short @ 3791.75 which stopped out.
Quick Tip: Banking it…
How traders approach their craft is very individual. Three traders using the same strategy may have different beliefs that vary their results, yet they follow the same entry and exit rules.
For example, yesterday’s buy at 3736.75 soared to the suggested short at 3791.75 for a 55-point gain. That’s a big win for a day trader. Would you bank your day or keep trading? This decision has nothing to do with the strategy rules. It’s personal money and time management.
One trader banks the day to research other strategies.
Another trader works the entire day, taking all setups and gives back half the gain.
Another trader banks the day, turns to simulated mode and trades the remaining day for...
Tuesday’s Best S&P Turning Points Results: Shorting 3777.50 stopped out.
Quick Tip: Futures Rule
If you’re know all the benefits of trading the Futures markets skip to the World Sentiment Index below. If you do not, this will be an eye-opener for you.
Here are the 5 key benefits of trading Futures:
1. Accessibility: Markets are open 23 hours/day from 6PM ET on Sunday to 5PM ET on Friday
2. Diversity: Trade stock indexes worldwide, popular cryptocurrencies, currencies, interest rates, metals, energies, agricultural, meats, and “softs” (think cotton).
3. Minimal Capital Required: With the release of smaller (Micro) contract sizes it is now possible for a retail trader to get started with $5000 assuming good risk management.
4. Superior Leverage: Depending on the contract, several times better than the stock market.
5. Tax Break: Futures gains are taxed...
Monday’s Best S&P Turning Points Results: Shorting 3678.50 ran for 18.75 points.
Quick Tip: Goals & Style
If you were building your trade plan and your mentor told you to determine your trading style and set goals, what might they be?
Money probably came to mind first. Not a good goal, though. Money is a byproduct of skilled trading. Your goals should pertain to your development in becoming an expert trader. Style selection, trading platform usage, order entries and exits, research, documentation, review, all require practice and skill.
One clever way to determine your goals (for anything) is to make a list of what you DON’T want to do.
For example, there are so many ways to trade the markets and not every style or niche is going to resonate with you. Instead of trying to figure out what your preference is, start by listing what you know is not.
You may have no interest in reading public company SEC filings,...
Friday’s Best S&P Turning Points Results: Buying 3623.50 stopped out.
Quick Tip: Do Nothing
Your job might make becoming a winning trader difficult for you. Not because of the time commitment, but because jobs 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 sometimes it is the better decision. There are times when the probability of success is low. Don’t trade. Unlike your job, doing nothing is completely acceptable.
While market catalysts like economic reports and global news events are the obvious times to not trade, there is another “event” that can be worse: how you feel.
Mindset is critically important...
Thursday’s Best S&P Turning Points Results: The suggested buy @ 3650.00 stopped out.
Quick Tip: Reinvention
Great performers, traders included, never quit when the inevitable roadblocks and challenges arise. They adjust, learn from their mistakes, and move forward.
You’re heard the term “reinvent yourself.” Out of favor actors do it. Corporations do it. Sometimes traders must do it.
Like many traders who enjoyed the Tech Bubble in the late ‘90’s, I was trading a momentum strategy that printed money. It was simple and easy. Even during the crash, it performed well going short. Then it stopped working. The volatility dried up and the risk reward profile flattened. I churned out a sizable losing year after several great years.
When your strategy or style stops working, look at the current market conditions. It may be time to retire the strategy and reinvent yourself. All strategies...
Wednesday’s Best S&P Turning Points Results: The short suggestion ran 16.25 points with only 2 ticks adverse move.
Quick Tip: Entry Finesse
The Volume Profile strategy we trade is proprietary. We’re looking for levels on the price axis, where spikes in trading volume occurred historically.
One nice feature of this method is we know in advance where the high probability turning points are located. This means we can place orders in advance.
The risk on the chart above was 4.75 points. If you wanted to limit your risk and not reduce your position size you might be tempted to place the order deeper in the level.
Here’s why that’s not the best idea. Notice on the chart of yesterday’s short idea that price only went 2 ticks against before delivering a decent winner. We know from hard evidence (>12,000 entries in all market conditions) that price will move against by 1 point...