Thursday’s Blog Results: Your suggested buy level at 4786.25 ran for 13.50 points.
Today’s Trading Tip: How fills work.
Trading futures contracts on the Globex exchange (cmegroup.com) might be the fairest market in the world. Why? Because the orders are time-stamped upon arrival and filled on the first-in first-filled basis. No one gets preference. You’re in a line and it doesn’t matter if you’re a small retail trader or an institution.
Real-world example: Looking at the winning trade from yesterday (see chart above) you’ll notice that price turned right on the suggested buy level. Not even one tick penetration. This does NOT mean you got filled. Some contracts were filled there but maybe not yours. Maybe you were too far back “in the line” and price bid higher before you filled.
One of the many benefits of this strategy is that you can place these orders when you receive this email. It was sent at 7:14 AM ET and the trade was...
Wednesday’s Blog Results: No trades triggered.
Today’s Trading Tip: How the legends did it.
You know it all when you don't.
My kids reminded me of that. As they approached their teens I noticed they were all smarter than me. Or so they thought.
This made me recall how I was as a teen. Yup. Dad was wrong and I was right.
In my infinite "wisdom" back then I decided history was a waste of time. I barely passed those classes.
A couple of decades later I became regretful. History is vitally important. It's a fabulous and free learning experience from the best mentors you could find.
I read a White Paper the other day on the history of Trend Following (in trading). In only 15 pages of "study" I know infinitely more about how trading has evolved over the past... centuries!
Why should you read this white paper? Because you will learn HOW the BEST traders in history made their fortunes and shaped the industry for us today. Will that give you some edge?
As I mentioned, the...
Tuesday’s Blog Results: The suggested buy at 4772.50 caught the bottom of the day session running for 14.75 points before ending the day +7.25.
Today’s Trading Tip: Goodbye frustration.
What frustrates you? Losing? Missing a winner? Not understanding? Slow markets? Fast markets?
Frustration is a common emotional response to opposition, annoyance, or disappointment. It happens when your goal is denied or blocked.
In many areas of your life, you can and do control the outcome. You’ve learned through growing and experience how to “get what you want.”
In trading you cannot control market behavior. You need to truly accept this fact. Once you do, your need for control can be transferred to the ONE thing in trading you CAN control… your behavior.
If you want to finally rid yourself of frustration in trading follow these 5 simple steps:
Thursday’s Blog Results: The suggested short level at 4736.25 stopped. Team members saw the breakout run for 43.75 points at the close.
Today’s Trading Tip: Learn don’t burn.
We know that failure and mistakes are inevitable. Losing trades and investments will continue to happen. Then why can we be so hard on ourselves? It’s a complete waste of energy and exacerbates the problem.
A great habit I learned from Jim Kwik, author of Limitless (highly recommended, jimkwik.com), is to re-focus on learning from your failure. This immediately shifts your energy from negative to positive. The compound effect is amazing. Instead of wasting time stewing about your loss, you learned what NOT to do next time.
Many of the traders on our team took the breakout that ran smoothly for 43.75 points. Most didn’t get the entire gain (myself included). Instead of being self-critical, being grateful you captured most of the gain and journaling HOW you’ll change your trade...
Thursday’s Blog Results: The suggested short level at 4726.75 was good for 6.75 potential points.
Today’s Trading Tip: Attitude is everything
The late Mark Douglas wrote two excellent books on trading that you should read and reference. Trading in the Zone and The Disciplined Trader: Developing Winning Attitudes.
Why? Because “Trading is 80% psychological and 20% methodological.” Here’s a link a Mark Douglas video a dedicated trader on our team shared with us. This should get you motivated to paying more attention to this often neglected side of trading: https://youtu.be/s8hg-1Rfs7c
Today’s Best S&P Futures Turning Points:
Short Level: Sell 4736.25 stop 4740.00 (3.75 risk).
Long Level: Buy 4700.00 stop 4695.25 (4.75 risk).
Happy Holidays and Trade Well,
P.S. This blog is my daily gift to hundreds of traders who read it every day. I would LOVE to hear from you!...
Wednesday’s Blog Results: The suggested short level was touched but too late in the day to trade.
Today’s Trading Tip: Simplify
Legendary golf coach Harvey Penick wrote in his best-selling book that you could build a solid game of golf around ONE CLUB. The 7-iron. Amazing and true. More importantly, his wisdom can be applied to trading.
Your email, like mine, is probably jammed with dozens of “how to trade” offers every day. Your choices for learning strategies, getting trained, and building your trading skills are endless. In fact, you’re probably CONFUSED. Too many choices lead to indecision.
If Harvey Penick were coaching you he would probably say “Simplify. Focus. Pick one and MASTER it.” Keep the 7-iron in your bag. Leave ALL the other clubs at home. Add another club only once you’ve mastered the 7-iron.
Along those lines, here’s a simple checklist you can apply to your trading:
1. How much TIME can you devote to trading? An...
Tuesday’s Blog Results: The suggested short at 4623.50 stopped out.
Today’s Trading Tip: Anticipation
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: Practice anticipation. 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. Why is this happening? What catalyst occurred? Will it continue or reverse? What are the likely outcomes?
Monday’s Blog Results: The suggested buy at 4527 stopped out.
Today’s Trading Tip: Asymmetry
In its simplest form trading is nothing more than risking money to make money. You need to be a net winner. This will happen if your losses are kept “small” (that’s a relative word) and you have…
Successful traders look for asymmetrical trades. These are trades where the risk is very small compared to the potential gains.
One application for asymmetry is frequently overlooked. Trade direction. Evidence shows that price tends to fall faster than it rises. Look at enough charts, measure the moves, you’ll find it’s true most of the time. Tops tend to be “round”, bottoms tend to be “V” shaped.
Given this reality, shouldn’t your exit rules for shorting be different than for going long?
Doesn’t it make sense to take quicker profit on plunges in price...
Friday’s Blog Results: The suggested buy at 4616.50 stopped out. The suggested short at 4658 missed filling a great runner by 1 point.
Today’s Trading Tip: Breaking a bad streak.
If you missed our weekly trade review session, LookBack (5), the recording is up here. After 14 winning weeks our strategies hit the inevitable losing week.
Here’s what we know from our documentation and 9500-trade database: Losing streaks become winning streaks. And vice-versa. There’s even some math about this phenomenon called Theory of Runs.
The chart above shows every high-volume level that was likely to be touched in last night’s Globex session. After last week’s losses, right when you might be wondering if you should quit, the tables turn and you have 7 winners in a row. Obviously, it takes confidence to persist when losing. That confidence comes from your experience and the evidence you have.
If you’re wondering about the rules followed to get those 7...
Thursday’s Blog Results: The suggested buy at 4715.25 offered a modest 8-point run. The short breakout afterward stopped out.
Today’s Trading Tip: Taking profit.
If your day-trading strategy has edge then you won’t see many trades go against you to stop out immediately. Of course, you’ll have plenty of stops triggered, but most will show some open profit before stopping out or moving on to your target(s). This is the nature of trading small time frames intraday. Price can be “noisy.”
Every asset will differ, but you can and should find their price movements that recur over and over. This data will give you better profit targets.
Here’s an example based on the S&P futures trading a Volume Profile strategy with 9,508 trades logged. Price will FILL a 2-point target 62% of the time (meaning it moved at least 2.25 points to guarantee execution). Price will FILL a 4-point target 38% of the time and a...
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