Thursday’s Results: Neither suggested level triggered. 

Quick Tip: Open Up

You have a rule-based plan with edge. If not, get one or quit trading. Rules in this case are meant to be followed. You want to be as machine-like as possible. Not easy for many of us, but that’s the goal.

Imagine that your plan is working fine. Your discipline following it is very good. Then you meet a trader who tells you there is a better way. 

What’s your reaction?

1. Nod politely, congratulate her on finding that “gem” and carry on doing what you’ve always done. 

OR…

2. Get excited, immediately re-write your rules, and expect a big improvement. 

You’ve probably met both types of traders. Fixed, disciplined, rarely willing to change and excitable, glib, and always changing. There is good and bad in both personality types. 

Consider a middle ground. When you hear of a “better...

Wednesday’s Results: CPI volatility blew price through the suggested buy @ 3772.50. 

Quick Tip: Don’t Trade

There are times when you shouldn’t trade. The CPI news yesterday was one of the times. Price became too volatile with slippage galore. There are other key catalysts you should monitor to know when not to trade. Some of the catalysts are asset-specific, like the EIA Petroleum Inventory Report (for oil). 

Add this simple step to your morning routine. Go to ForexFactory.com   even if you don’t trade currencies. Their economic calendar is one of the best. You can filter the calendar by currency, event type, and “impact” to get the exact information you need. 

If you trade stocks, you’ll need to know earnings release dates. Try EarningsWhispers.com. 

Today’s Best S&P Turning Points (in fast moving markets consider a wider stop and less size): 

Sell 3806.50 stop 3812.25. 

Buy...

Tuesday’s Results: Neither suggested trade triggered. 

Quick Tip: The Calm Routine

Even if you don’t golf you’ve probably heard that it’s a mental game. Most athletics are. Trading is too. Dr. Richard Coop, author of the book “Mind Over Golf” advises players to have their own personal “pre-shot routine.” Let’s use his advice but change the details to improve our trading. 

1. If you’re approaching a trade entry with a negative feeling, pause and use some physical ritual to regain calm control and reset your concentration. The ritual may be standing up and stretching or closing your eyes and counting backward from 10 to 1. It can be whatever you want. 

2. To avoid the negative feelings going forward, develop your own pre-trade routine. This keeps stray thoughts that can be detrimental from entering your mind while trading. 

3. The trick is to develop this pre-trade routine...

Monday’s Results: Neither suggested trade triggered in another range-bound day. 

Quick Tip: THIS is Freedom!

It’s popular today to know your “Why” to achieve your goals. The idea is the more passionate about your goal you are the better you’ll persevere through the setbacks and challenges that inevitably occur. 

When asked what my “Why” is for trading and teaching I respond with one word: Freedoms. Plural. Freedom of time, location, and money concerns. 

Yesterday I saw a tweet from my friend and colleague Jeff Manson. He is also a trader and teacher. The header read “Good Morning FROM Viet Nam!”, a play on words from the movie. He is in Saigon, one stop on his travelling the world while trading and teaching online “tour.” Now THAT is Freedom! Thank you, Jeff, for pointing me to my next goal!

How about you? Think big. Set the goal. Make your “Why” a...

Friday’s Results: Neither suggested trade triggered in a range-bound day. 

Quick Tip: Abundance

The more trade setups you have available the choosier you can be in taking trades. Abundance is good. The opposite is true. Too few setups can find you taking trades that are not ideal. 

Given that markets are changing character from trend to range and volatile to quiet, the ideal solution for abundance is to have multiple strategies that are tuned for those varying conditions. 

In yesterdays’ Optimizing Multi-Strat Trading mini class we showed how to gain this edge. Watch the recording here (time sensitive discount offers expiring at midnight tonight!). 

Today’s Best S&P Turning Points (in fast moving markets consider a wider stop and less size): 

Sell 3943.00 stop 3947.25 (same as Friday).

Buy 3834.50 stop 3829.75 (same as Friday). 

Trade Fearlessly,

Mike Siewruk

Thursday’s Results: The short @ 3900.75 stopped out. The breakout long was only good for 8 points. 

Quick Tip: Trend or Reversal?

You might be thinking that trading the trend sounds safer than picking a turning point. Many strategies focus on trading in the direction of a larger time frame trend. This makes sense and it works. 

But it’s not necessarily “safer.”  Your initial priority is making sure your trade plan rule set has “edge,” meaning over time it’s profitable. After you have that the idea of “safe” becomes irrelevant. Just trade the strategy that appeals to you psychologically. 

Here’s an even better idea: Learn both trend and reversal trading then use the correct strategy for the current market condition. Sounds simple but just like trading in general, not necessarily easy. Given enough research and statistical evidence,...

Wednesday’s Results: The short @ 3860.50 was only good for a 9.50-point move (using the wider stop).

Quick Tip: Fast Price Action

Market conditions are dynamic. Volatility comes and goes. Your trade plan should have rules that are adjustable to these changes. 

Yesterday is a good example. Post-FOMC minutes release price became fast and volatile going just a couple of ticks beyond our normal stop (see chart). The level only stalled price and worked for 9.50 points favorable. But that’s better than stopping out by not acknowledging the character change in the market. 

Another rule you can use is to scale-in your position as price moves against you. It sounds like you’re adding to a loser but that’s not the case on entry. Price will whip around and saving a few points scaling in not only lessens your risk but adds to your profit targets. 

We’ll be covering many more of these “edges” in...

Friday’s Results: Friday’s Results: Neither trade suggestion triggered. 

Quick Tip: Volume/Share Bars

Trading can be simplified to the analysis of 3 variables: price, time, and volume. Using time-based charts is most common and important. In them you can see wide and narrow range bars/candles giving you evidence of where big moves started and slowed or stopped. Good to know. 

Another view that offers some “hidden” information is the Volume or Share bar. These are time independent. They paint a new bar after “X” number of shares/contracts have traded. If you’re trading an active futures contract like the S&P (or a stock like AAPL) you can have your share bars set to 10,000 (or more) to instantly “see” what volume filled in a move by simply counting the bars. That can be accomplished by adding a volume indicator to the chart, but with the share bars you’ll see the...

Thursday’s Results: The short @ 3817.75 caught the high of the session and ran for 51 points (if you used the wider stop suggestion). 

Quick Tip: Decide / Correct

Predictions, forecasts, and feelings. Helpful or not? You could argue that the only thing that matters is what price action is suggesting in present time. Fair argument. 

But are you prepared for what price action is suggesting? Are you using the correct strategy for the current market conditions? Will today be a trending or range-bound day? It’s helpful to consider this before you get started. If the market changes character then you can change your outlook. It’s good for your confidence to have an outlook from the start. 

I read a quote the other day that pertains. Nina DiSesa, named by Fortune magazine as one of the 50 most powerful women in American business (in 2000) said “You can always correct a poor decision, but if you do nothing, you can never...

Wednesday’s Results: Neither trade suggestion triggered in a relatively narrow-range spiky day.

Quick Tip: Pay Yourself

If you’re like many 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 trick 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...