The Daily Market Forecast... glad you disagree!

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...

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The Daily Market Forecast... quick fix-itis

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.

What is...

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The Daily Market Forecast... your unsatisfied need.

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...

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The Daily Market Forecast... the day matters.

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...

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The Daily Market Forecast... knowing when to change.

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...

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The Daily Market Forecast... Why you lose.

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:

  1. You’re risking too much money.
  2. You have no confidence in your strategy rules.
  3. You aren’t following your strategy...
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The Daily Market Forecast... abundance.

Wednesday’s Blog Results: No trades triggered for the day session. Team members saw the short @ 4497.75 run for 50.50 points to the day session close.

Quick Tip: Abundance

The Globex session can be very productive. Many days it’s better than the day session. Less whipsaws. Managing open trades is the challenge. We’re all sleeping.

You can set a stop loss order that trails the price action. This means you’ll always see price go farther than what you took from the trade. This may play with your head. Looking at the chart above you see the price reversal that would trigger your trailing stop.

How do you feel about keeping 21 points of a 50-point run? Lots of different answers to that question and none of them are wrong if that’s your comfort zone. See, if you didn’t trail-stop you would have watched the trade give up 28.25 points on that reversal (blue line). How would you feel then?

The point here isn’t about what is the better exit....

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The Daily Market Forecast... "Zc ROI"

Tuesday’s Blog Results: No entry on long. Short scalped 6.50 points MFE.

Quick Tip: “Zc” ROI

What? “Zc?”

OK… Zc = Zero Cost ROI. Costs nothing, returns outrageous returns. Skeptics and half-empties are moving on. 

You’re not.         

Zero-cost ROI is real. It’s what you get when you read every day. The more topics the better. Reading is the greatest time investment. Period.

Make it a habit. Here’s how: Make a commitment to read something interesting, relevant, and beneficial every day. Set a time limit. 30 minutes is good for starting this life-changing habit.

But to make the habit stick, you need a carrot (get it, stick or carrot?). So, let’s say you want to get your brain started first thing in the morning. Read something motivational for 30 minutes. THEN you reward yourself with a cup of coffee, tea, or lemon water. That is how you make a habit. Do-then-reward. It...

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The Daily Market Forecast... be proactive

Monday’s Blog Results: Neither level triggered. Team members saw the Globex session behave very well. If you’re not trading the better, more productive Globex session, you’re missing the easier money. (see chart).

Quick Tip: Be proactive, not reactive.

With 40+ million copies sold and a release date in 1989 you’re likely to have read Stephen Covey’s “The 7 Habits of Highly Effective People.” If not, do it now. It is excellent advice and timeless.

Habit #1 says be proactive, not reactive. With so many different styles of trading, you know there are strategies that you can “set and forget,” and strategies that require real-time scrutiny. Proactive vs. Reactive.

Our team of traders do both because we run 4 different strategies (plenty to pick from… sometimes it’s like Thanksgiving dinner). Our volume profile, supply/demand, and SPX strategies can be “set and forget.” Our volatility reversal strategy requires...

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The Daily Market Forecast... Stop-n-Start

Friday’s Blog Results: The suggested long never triggered but the short @ 4412 ran for 19.75 points.

Quick Tip: Stop-n-start.

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. Then you 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 the performance of individual strategies, not your whole trading account.

Here’s an example of a rule set (see graphic above):

  1. Track the equity curve of the strategy.
  2. Measure the drawdowns and select the longest you can tolerate.
  3. The next time the equity drops...
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