Yesterday: The suggested long at 4470.50 only bounced 4.75 points before continuing down.
Quick Tip: Breakeven is a win.
Big win, little win, breakeven, little loser, big loser. All the outcomes of your trades. You don’t allow for big losers so that leaves all acceptable outcomes.
You can turn some of those little losers into breakeven trades. If you move your stop to breakeven after a pre-determined move in your direction (we use 4 S&P points) the outcomes are big win, little win, breakeven. Your drawdowns will be smaller. Your equity curve will be smoother.
What’s the downside? Subsequent price action doesn’t touch your original stop and the trade went on to your profit targets. You missed a winner.
You need confidence in your strategy and rules to succeed. Choose the style that appeals to your personality. Then keep records of every trade setup, taken or not, to find out which is better financially.
Today’s Best S&P Futures Turning Points:
Tuesday’s Results: The suggested short @ 4580.50 nailed the top of the day session and ran for 63.75 points to the close. How much did you get?
Quick Tip: Orphans.
Entry decisions are easy. Exits are tough. If you managed this trade you likely took profit before the end of the day. There were two 15+ point corrections in the trend down. Watching that money leave your account is tough. Not getting the full move of 63.75 points is tough, too.
All-star trader Larry Williams, in his book Long-Term Secrets to Short-Term Trading, finds that his best trades are those exited at the close. He researched and tested all kinds of exit strategies to determine this. His advice: enter and walk away. Come back at the close.
Another great trader I know, Bob Dunn, would say something similar. His view is NOT to cap your wins but let them run. In fact, this is a common view from many great traders. Cap your losses and let your winners run.
The challenge is this: you’re reviewing...
Subject: The foundation of success.
Success at trading, at anything, is formulaic. No one stays successful at anything without a proven formula to follow. What’s yours?
You may think it’s your trade plan. You may think you need the hottest strategies, the best broker, more risk capital, and better sources of information. All that surely helps but the foundation for your success starts within you. It’s your belief.
Do you honestly believe you can become a top-notch trader? Or are you thinking of giving it a try? Trying isn’t enough to overcome the challenges of anything worthwhile. It’s a negative belief. Knowing you’ll succeed is a positive belief.
The glass-half empty trader will think, “I don’t KNOW I’ll be successful, but I’ll try my best.” The glass-half full trader visualizes their success every day. Regardless of their daily result. You will have losing...
Friday’s Blog Results: No short fill. The long level @ 4510 stopped out for a 3.50-point loss (per contract).
Quick tip: Lose your edge?
Your trade strategies must have “edge,” otherwise you’re gambling and likely losing. The challenge is that edge is not always permanent. You need to be vigilant in your review process and notice when the edge may be fading or gone.
Our team has been relying on some edge that was validated by thousands of trade setups. This past weekend I updated the edge document to reflect current market conditions and some of those rules needed adjustments.
Strategies and trade plans can evolve. If you’re losing confidence in your strategy don’t assume it lost its edge. Research your results database. You might find, as we did, some minor changes to reflect a changing market will bring the edge right back. Learn more about trade plans and edge. Click here.
Today’s Best S&P Futures Turning Points:
Thursday’s Blog Results: Neither trade triggered but the buy @ 4534.75 did touch and bounce for 6-points at 3:59 PM ET, too late to enter.
Quick Tip: Glad you disagree!
In Stephen Covey’s bestseller, “The 7 Habits of Highly Effective People”, the 6th habit is Synergize. The concept of synergy is real and born in nature. You’ll need to read the chapter (the whole book would be better) to get all the details and proof. Just assume it’s true for now.
Think about this: If everyone you talked to agreed with you about the subject at hand, would there ever be any improvement to the subject (process, strategy, plan, etc.)? Nope. Case rested. We agree. Move on.
That is precisely why you should embrace disagreement… from a constructive viewpoint. Different opinions and outlooks, when approached properly can lead to dramatic improvements. It’s obvious. No one knows it all. Only by being open-minded and willing to understand a counter...
Wednesday’s Blog Results: Neither trade triggered.
Quick Tip: Quick Fix-it is.
Wouldn’t it be fabulous to find the simplest, easiest, most profitable trading strategy that you could master in minutes?
Hell yeah! But not likely. Not even remotely possible. Innately you realize this is true. You know that wishing for this “winning Lotto ticket” is a fruitless solution to your need for sustainable trading skills.
Let’s turn the table. What if you were told this: “Successful trading requires intense study, practice, hard work, time commitment, and devotion.” Sounds overwhelming, doesn’t it?
But what if the result of that intense study, practice, hard work, time commitment, and devotion enabled you to fulfill your deepest lifestyle desires? What if you were so skilled that you didn’t even have to think about the job? It was like muscle memory. You just “did it.” All the rewards were obtained seemingly instantly.
Tuesday’s Blog Results: No trades triggered. BUT the short level missed fill by only 2 ticks. Reframe that as a positive for the strategy.
Quick Tip: Your unsatisfied need.
You’re either a trader or thinking about becoming one. Either way, to succeed in trading (actually, anything in life) you must be motivated. Why? Because there will always be setbacks, frustrations, losses, failures, and rejections. If you’re not motivated you won’t persist. You’ll quit and carry that psychological “loss” with you. Collect enough of those and you’ll be miserable.
The answer is to get and stay motivated. But how? Find your unsatisfied need. You don’t require motivation for anything that you’re already satisfied with. You don’t even think about it. If you have enough money for acceptable shelter, food, transportation, and recreation you’re not worried. You have those. You’re covered.
But if you don’t have enough...
Monday’s Blog Results: The buy ran for 52 points. The short offered 8.75. BOTH only had 2 ticks of adverse move. You can PayPal me a tip if you’re feeling guilty.
Quick Tip: The day matters.
Imagine if you could click the “print” button and a report would stream from your printer that showed how much money you made or lost by day of week. Would it surprise you if you lost money most of the time on a given day of the week? Say, Thursday? Would you call it coincidence and keep trading or would you stop?
If you’re not documenting all your trades, taken or not, with plenty of related information you’re missing out on huge “edge” potential. Day of week matters. Time of day matters. Volatility matters. The list goes on and on. Commit yourself to building your own results database rich with all the data points you can think matter.
From “start” to meaningful results takes plenty of time. Prefer a short cut? Click the button below...
Friday’s Blog Results: Neither suggested level triggered.
Quick Tip: Knowing when to change
Markets are like the weather, always changing. Trends become ranges. High volatility becomes low. Vice versa.
If you carefully analyze your drawdowns you may find that the change in market character was the cause. You can only do this with confidence if you’re logging plenty of data points in your documentation process. We track 43 different data points for every trade, taken or not. This gives us evidence to know when to change.
Here’s an example: The war in Ukraine contributed to an increase in volatility. Losses accumulated. A review of prior periods of abrupt volatility increases showed something counter-intuitive. Reversal trades perform better than breakouts.
Huh? It sure seems with wild swings in price that breakouts would be fine. Maybe for some strategies but not one of ours. Until calmer times we’ll focus the...
Thursday’s Blog Results: No buy fill. The short @ 4497.75 ran for 21.25 points with only 1 point of adverse move.
Quick Tip: Why you lose.
Seems odd that loss would be the topic after posting a nice winning trade. But it’s more important.
Losing trades are inevitable. In fact, losing streaks are inevitable. Drawdowns in equity happen. The challenge everyone faces with losing is your belief system. We are hard-wired from early on to think losing is bad. Not so in trading. Losing BIG is bad. Losing because you didn’t follow your trade plan is bad. But losing at your pre-determined stop loss is GOOD.
Why? Because you only lost what you can truly afford to lose both financially and psychologically. It should be “no big deal.” Your losses should never get you anxious, upset, or reactive. If they do, there are only three reasons: