Trade Aptitude

investing stock market Jun 14, 2024

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

Thursday’s results: This strategy is on hold. 

The World Index: (+100/-100) rises from -43 to -36 with the Western world the most Bearish.   

Catalysts: Import/Export Prices @ Fed’s Mester @ 8:30. UofM Consumer Sentiment @ 10:00. Fed’s Mester @ 13:15, Goolsbee @ 14:00.  

Quick Tip: Position Trading

If you’re too busy to trade short term, or simply don’t prefer that style, buy-and-hold is probably how you’re invested. You can potentially improve your results by treating those positions as trades, hence the name Position Trading. 

The stock market is an excellent source of position trade ideas. The selection is second to none. The returns over time can be incredible. The capital efficiency is not great though. You can do better by substituting options for stocks. 

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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. 

The World Index: (+100/-100) plummets from +7 to -43 with most major world markets Bearish.  

Catalysts: PPI & Jobless Claims @ 8:30. Yellen & Fed’s Williams @ 12:00. 30-year Bond Auction @ 13:00. 

Quick Tip: Your Niche

Dr. Brett Steenbarger, in his book Enhancing Trader Performance (must read), writes about the importance of FIRST finding your niche in trading. 

Too many new traders spend their time and money trying to find a strategy or indicator that makes money. They think that’s all there is to trading successfully. 

The more important aspect is style. What style of trading resonates with you. There are so many different markets, timeframes, and styles of trading. If you could experiment with several different “niches” you’d be way...

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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. 

The World Index: (+100/-100) jumps from -43 to +7 with sentiment mixed. 

Catalysts: CPI @ 8:30. Crude Oil Inventories @ 10:30. FOMC Announcement @ 14:00. FOMC Press Conference @ 14:30. 

Quick Tip: FOMC Moves

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 Federal Funds Rate 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,...

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Trade Aptitude

         
         
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Trade Aptitude

trade planning Jun 10, 2024

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

Friday’s results: This strategy is on hold. 

The World Index: (+100/-100) dips from -36 to -43 with most major world markets Bearish. 

Catalysts: Nothing obvious today, waiting on FOMC Wednesday. 

Quick Tip: Entries are Exits?

Exiting your trades is when all the money is made or lost. The loss is a simple decision, where your stop order rests. The profit decision is trickier. 

Imagine you’re long and price is behaving well, moving up firmly. The only certainty you have is that it won’t go up forever. There will be stalls, corrections, bases, and reversals within the move. 

When do you take profit? 

Some traders make this an arbitrary decision. A dollar amount. But that may not be optimal. 

Other traders will use a trailing stop. If you do, make sure you’re adjusting the stop distance for current volatility. And...

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Trade Aptitude

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

Thursday’s results: This strategy is on hold. 

The World Index: (+100/-100) plummets from +43 to -36 with all major world markets flat or Bearish. 

Catalysts: Non-Farm Payrolls/Unemployment Rate @ 8:30. Fed’s Cook @ 12:00. 

Quick Tip: Great Job! 

Your focus when trading should be on doing the job well. That doesn’t necessarily mean winning. You can do your job well and lose. Why? Because we have no control over the outcome, only our behavior and discipline to follow our rules. 

Here are your main “job” components as a trader: Research, practice, preparation, execution, and review. 

There are plenty of analogies that compare traders with athletes, musicians, artists, and the military. These are all considered performance activities. So is trading. Think...

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Trade Aptitude

trade planning Jun 05, 2024

 

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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. To understand why, read yesterday's newsletter.

The World Index: (+100/-100) plummets from +57 to -29 with most major world markets Bearish.  

Catalysts: JOLTS & Factory Orders @10:00

Quick Tip: Your Hot List

If you’re a directional stock or options trader you know the importance of stock selection. All the trading skills in the world don’t matter if you’re trading assets that don’t move. 

You could look at the historical performance of stocks to assume their past will repeat in the future but that’s not ideal. 

There is a better way… a true Leading Indicator. Insider buying. Key executives have only one reason to write 7 and 8-figure checks to own more of their company. They think it’s going up and research has proven this to be true.

From "The...

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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. 

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

Catalysts: Final MFG PMI @ 9:45. ISM MFG PMI, MFG Prices & Construction Spending @10:00

Quick Tip: When to Stop

All trading strategies have drawdowns (a protracted losing streak). The challenge is trading through it. You can’t stop thinking that it may “never come back” or churn for an extended period. Or you could get FOMO and think if you stop now it will roar back and you’ll miss the gain. Obviously, these thoughts are destructive. Don’t go there. 

What you should do is have Stop-n-start rules to follow. These are rules that tell you when to stop trading the strategy and when, if ever, to start up again. This will take the emotion out of the process. Apply these rules to...

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Trade Aptitude

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

Thursday’s results: This strategy is on hold. 

The World Index: (+100/-100) eases from -29 to -14 with sentiment mixed on varying volatility, leaning Bearish. 

Catalysts: PCE Price Index, Personal Income & Spending @ 8:30. Chicago PMI @ 9:45. Fed’s Williams @ 12:05. 

Quick Tip: Good Question

Think for a moment before you answer this seemingly simple question. Do you find it harder to take a loss or a profit? 

The answer says a lot about your trade plan, style, trading psychology, and what you need to work on. 

If your answer was a loss, then your risk management plan needs help. You’re probably risking too much. You might be trading the wrong strategy, one with more losers than winners like trend following. Your personality might be the problem if you get annoyed being wrong (trading is about probabilities, not...

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