Wednesday’s Results: The suggested buy at 3932.75 triggered late and bounced for 4.75 points before failing.

Quick Tip: Time Filters

One easy and excellent filter you should apply to your strategies is “time-of-day.” Your broker should have a download available to you with time stamps on all your trades. Import this to a spreadsheet and sort the trades by time of day. If you have enough trades you may see a pattern.

Going forward, its’ better to capture more information about each trade to fine-tune your filter. For example, one strategy here offers both reversal and breakout trades. With that appended to the time-of-day data, you can see if there is an edge for either of those trades. Obviously, you’ll customize your data captured to fit your rules. Remember to document all trade setups, not just the trades you took.

Here’s how this can be helpful: Yesterday’s buy suggestion triggered at 3:45 PM ET. Not much time left in the session. It was...

Tuesday’s Results: Neither suggested level triggered.

Quick Tip: Proactive Waiting

Plenty of time in trading is spent waiting. Waiting for a setup, waiting for an economic release, waiting for a profit target. Lots of waiting.

Here’s how to make this “downtime” productive: Get proactive. Get in the habit of asking “What if…?” questions. Answer them. In doing so you’ll be making decisions in advance and be able to act on the spot. No wondering, guessing, procrastinating or flat-out missing the trade. You’ve committed with foresight.

Here's a simple example: Price is slowly moving sideways. Your entry price to buy is far enough away that you don’t expect to see it trigger soon. Suddenly price plunges. The speed candle down is looking powerful.

Now is the time to anticipate, be proactive. Will it continue or reverse? Do you see any other chart features that could stall it? Accelerate it? What are the likely outcomes?

1. Slam...

Monday’s Results: Buying 4002.00 stopped.

Quick Tip: Reframing

As you review your trades from yesterday you’ll likely pause at the suggested buy at 4002. It was stopped out by only 3 ticks and then ran for more than 40 points.

Was the stop too tight? Was the entry too soon? You’re thinking about how you could have gotten into the trade.

Now if you’re a discretionary trader with no evidence of edge, just intuition and experience, that may be the correct review process.

Our team is rule-based. We work with statistically relevant evidence to make trading decisions. Pondering the reasons how we could have “made” it a winner is a waste of time. Specifically, we know that our entry and stop were correct probability-wise.

The review process then becomes “reframing.” Taking a negative and making it positive. Ask yourself, “More or less, did that volume level work?” Yes! It picked an intraday “V” bottom and triggered a...

Thursday’s Results: Buying 4181.50 only offered a quick 6.75-point bounce.  

Quick Tip: Parabolic Moves         

Trending price moves in impulses and corrections in both directions. Three steps forward, one back. The trend continues until price moves sideways in a range. Eventually a new trend starts. Look at plenty of charts and notice this repetitive pattern.

Sometimes the trend portion of the pattern doesn’t move in impulses and corrections. It’s a smooth series of vertical candles Like Wednesday afternoon. This is a fabulous “tell” that price may move in the opposite direction just as fast. We don’t know when. This week it was the very next day! Other times you’ll find a range form before the reverse move.

Get in the habit of marking these parabolic moves on your charts. It will prepare you for a potentially sizable winner when the reversal occurs, or the new range breaks out.

...

Tuesday’s Results: Neither suggested level triggered on pre-FOMC trading.

Quick Tip: Rich & Quick Don’t Mix

A favorite book of mine is “The Road Less Stupid” from esteemed business manager Keith Cunningham. I bought it before knowing what it was about because the title was all I needed to read. You absolutely MUST get something beneficial from a book with that name!

It ends up being great advice on starting and running a business. Some of the advice is applicable to other areas of life as well. His writing style is easy-to-read, direct, and fun. Go buy it.

The industry of trader education is packed with “Kool-Aid” vendors. You know, the “How to Work only 4 Hours a Week and Retire a Millionaire by Next Year!” authors. Cunningham shares a fact that you should know which I found very interesting. Warren Buffet invested full-time in the stock market for 9 years before he made his first million. Ha! Not a great name for a book is it?...

Monday’s Results: Price fell below our buy level before the open killing the trade. No entry on the short idea.

Quick Tip: Set Your Payday

If you’re like most retail traders you are focused on growing your trading account so you can increase your risk and ultimately your expected reward. Taking a “paycheck” from your trading account seems like taking a step backward.

The trading account is intangible. The figures on the statement don’t mean the same to you as a tangible reward. Psychologically, you NEED to be rewarded for a job well done. Make those wins REAL.

Here’s a simple formula for getting paid, growing your account, and improving your trading skills simultaneously:

1. Determine your payday (weekly, bi-weekly, monthly).
2. Log your trading account balance at the start.
3. On payday calculate your gain/loss in the account.
4. Pay yourself a pre-determined percentage of the gain. Take nothing if you lost.

If you’re more interested in growing the...

Friday’s Results: The suggested long entry stopped out for a 4.75-point loss (per contract).

Quick Tip: Thought Journal

Documenting all your trade setups, taken or not, is critical to improving results. It’s quick and easy to do. With many strategies the information can be downloaded directly from your trading platform. There is no excuse NOT to have this valuable data.

Then there is the more important information most traders ignore… their thoughts and feelings. Trader psychology author and trainer Dr. Woody Johnson suggests that 80% of trading success is based on your personal psychology. If that figure is anywhere near accurate then you should be keeping what he calls a “Thought Journal.”

Start with the trades you take. You want to make this habit easy to acquire. Immediately after you place the trade log your mental condition. Sharp? Alert? Foggy? Fearful? Describe your feelings. Did you follow ALL the rules? Log the results of the trade afterward....

Thursday’s Results: Neither trade triggered.

Quick Tip: Expectations

“What are you struggling with?” was the question I asked a group of traders recently. One woman said she had expectation challenges. She felt she needed to acknowledge that every trade cannot be a home run, or “10 to 1” as she phrased it.

I respect her self-awareness. Expectations is not a commonly voiced trading challenge. But it is real. You can expect too much and foster disappointment. You can expect too little and minimize your profits. Neither view is healthy for your ultimate results.

If you are documenting all the trades of your strategies (taken or not) then you will have hard evidence and know what to expect most of the time. The challenge arises when the market changes character and you are still “expecting” something different to happen.

In “The Disciplined Trader” by the late Mark Douglas, he identifies nine critical trading skills.

#6 - Learning...

Wednesday’s Results: Neither trade triggered.

Quick Tip: Steps

Without goals people drift through life never achieving their true potential. This is not opinion but documented fact from numerous psychological studies. No goals? No progress.

Small and “reasonable” goals are typical for most people if they bother to set goals at all. Yet, they require the same attention as big and “audacious” goals. Really. But there is a difference in the path. The execution.

You’re reading a trading blog so let’s assume you want to achieve the goal of being a consistent, profitable trader.

1. Ignore the urge to set a small and “reasonable” goal. That may be something like earn $1000 per month from your trading. It’s not enough to keep you trying. You’ll likely quit before you get there because the reward you seek is not compelling enough to you. Why suffer up the learning curve for $1000 per month?
2. Set the big audacious goal first. The...

Tuesday’s Results: The suggested buy at 4237.50 stopped out.

Quick Tip: Turn Losers into Winners

There’s statistical and observable evidence that the population of “successful people” and “winning traders” is much smaller than the population of mediocre, losing, and failed traders.

If that’s the case, then the best lesson you could learn and the surest route to success in trading is to emulate the winners. Copy their successful actions.

Setting aside their actual strategy rules, which you may never be privy to, think about how they handle losses. They have them, too. The answer is almost always their attitude toward defeat and loss. They don’t commiserate, sulk, and quit. They carefully inspect those losses to determine how they can minimize or avoid them in the future. They get up after being knocked down. Every time.

Every loss, failure, or setback is a potential goldmine of a learning experience. The formula is simple but not easy...