Tuning Your Watch List by Trade Aptitude
Yesterday’s results: : No trades triggered.
Today’s Best S&P Futures Turning Points: Buy 5936.25 stop 5931.25. Short 6002.75 stop 6007.75.
The World Index: (+100/-100) drops from -7 to -21 with all major world markets neutral to Bearish on low volatility.
Catalysts: Retail Sales, Empire State MFG Index, Import Prices @ 8:30. Fed’s Collins @ 9:00, Williams @ 13:15. Industrial Production @ 9:15. Business Inventories @ 10:00.
Quick Tip: Tuning Your Watch List
Stock and option traders have a challenge that futures and Forex traders don’t have. How to winnow down your trading candidates from nearly 9000 stocks.
There are some common filters that are easy to implement like price and volume. Picking stocks that are between $10 and $50 reduces the selection to 2200. Add in average volume over 1 million daily and you’re down to 562.
You can keep adding filters to get to a manageable number,...
Second Chances by Trade Aptitude
Yesterday’s results: : Shorting 6032.75 caught the high of the session and ran for 25.50 points before closing the day +19.00.
Today’s Best S&P Futures Turning Points: Buy 6037.50 stop 6034.75 if price retraces down from above. No short candidate today.
The World Index: (+100/-100) dips from zero to -7 with the major world markets diverging, Asia is Bearish, the west is Bullish, range is increasing.
Catalysts: PPI & Jobless Claims @ 8:30. Fed’s Barkin @ 9:00, Powell @ 15:00. Crude Oil inventories @ 10:30.
Quick Tip: Second Chances
Yesterday’s short entry was effective three times. The expected sellers were clearly active. Historically, the first touch works best. Subsequent touches while still tradable, have less probability of success.
Why? Because every order initiated from the sell side reduces the number of contracts available for sale. Eventually there are no big sellers...
Trading in the 5th Dimension by Trade Aptitude
Yesterday’s results: Buying 5996.50 stopped out. Shorting the retracement to 5993.50 offered a 6.75-point scalp.
Today’s Best S&P Futures Turning Points: Short 6032.75 stop 6037.75. Buy 6037.50 stop 6034.75 if price retraces down from above (filtered out during CPI release).
The World Index: (+100/-100) soars from -71 to zero with the major world markets mixed on falling volatility.
Catalysts: CPI @ 8:30. FOMC speakers; Kashkari @ 8:30, Logan @ 9:45, Musalem @ 13:00, Schmid @ 13:30. Federal Budget Balance @ 14:00.
Quick Tip: Trading in the 5th Dimension
You could argue that chart trading is 3-dimensional. You’re analyzing price, volume, and time on a chart.
If you add fundamental analysis to your plan that would be your 4th dimension, and it would very likely improve your performance. Knowing more about the assets, sectors, and economy can only help you.
There is a...
Diversify Re-Defined
Yesterday’s results: No trades triggered.
Today’s Best S&P Futures Turning Points: Buy 5996.50 stop 5992.75. Short 5993.50 stop 5997.25 if price retraces up from below.
The World Index: (+100/-100) plummets from +36 to -71 with all major world markets Bearish on rising volatility.
Catalysts: Fed Speakers today: Waller @ 10:00, Barkin @ 10:15, Kashkari @ 14:00, Harker @ 17:00, Barkin @ 17:30.
Quick Tip: Diversify Re-Defined
One of our teams day-trades in the futures market. There is plenty of focus on the S&P 500 contract. Yesterday it traded in a relatively narrow range (31.75 points) and closed down 8 points from Friday. The other indexes weren’t very different. Ho hum.
Our other team swing trades options. You might think that given the lack of movement in the indexes that the options portfolio would be flat too. It wasn’t. In fact, there were specific options that moved substantially. My...
Windfalls by Trade Aptitude
Yesterday’s results: No trades triggered.
Today’s Best S&P Futures Turning Points: Buy 5996.50 stop 5992.75. Short 5993.50 stop 5997.25 if price retraces up from below.
The World Index: (+100/-100) soars from -50 to +36 with most major world markets Bullish.
Catalysts: Nothing on the economic calendar.
Quick Tip: Windfalls
Not nearly enough, but on occasion your trade becomes a windfall. Not so much in day trading but swing and position trading for sure. Maybe you bought NVDA 2 years ago and held on. Windfall!
Our swing trading team experienced a remarkable windfall trade last week. The strategy we used had to do with Unusual Options Activity. Simply put, these are huge bets on unlikely outcomes. The concept is that anyone who can bet that big must know some non-public information.
Following the chart above you’ll see we uncovered a Smart Money bet on 10/21. $2.1M was bet on this $160...
Parabolic Moves by Trade Aptitude
Yesterday’s results: No trades triggered. The suggestions stay on the chart.
Today’s Best S&P Futures Turning Points: Buy 5936.25 stop 5931.25. Short 5932.00 stop 5937.00 if price retraces back from below.
The World Index: (+100/-100) plummets from +50 to -50 with all major world markets, except Tokyo, Bearish.
Catalysts: UofM Consumer Sentiment & Inflation Expectations @ 10:00. Fed’s Bowman @ 11:00, Musalem @ 14:30.
Quick Tip: Parabolic Moves
Price generally 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, a parabolic move. Look at the...
Confirming Trend by Trade Aptitude
Yesterday’s results: No trades suggested.
Today’s Best S&P Futures Turning Points: Buy 5936.25 stop 5931.25. Short 5932.00 stop 5937.00 if price retraces back from below (filtered out during FOMC volatility).
The World Index: (+100/-100) eases up from +36 to +50 with most major world markets Bullish. J
Catalysts: Jobless Claims & Preliminary NFP @ 8:30. Wholesale Inventories @ 10:00. FOMC Statement @ 14:00, Press Conference @ 14:30.
Quick Tip: Confirming Trend
If you trade a trend strategy you know that the biggest challenge is filtering out the whipsaw, range-bound conditions. Arguably the king of using Wilders’s RSI indicator for trend identification was the late Andrew Cardwell.
His quote applies to all trading but especially for trend trades: “You do not have to make a lot of trades you just need to make a few good trades.”
Cardwell introduced the concept of “Range Shift” using RSI...
What's Next? by Trade Aptitude
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Losing Enough? by Trade Aptitude
Yesterday’s results: Neither trade idea triggered.
Today’s Best S&P Futures Turning Points: Nothing tradeable today.
The World Index: (+100/-100) jumps from +50 to +71 with all major world markets Bullish.
Catalysts: International Trade Balance @ 8:30. S&P Final Services PMI @ 9:45. ISM Services PMI @ 10:00. 10-year Bond Auction @ 13:00. Election Day.
Important: Check your broker’s policy on day-trading margin today. TradeStation requires full margin for the next 3 days! What does that tell you about volatility expectations?
Quick Tip: Losing Enough?
A popular formula for determining your risk on any given trade is the Fixed Percentage Rule. You pick a percentage, usually 2% or less, of your trading account and that is the most you can risk on each trade.
It works great because as your account grows your risk can increase giving you the opportunity for greater...
Abundance by Trade Aptitude
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