One of the clearest differences between professional and retail traders is this: professionals think in asymmetry, not accuracy.

Retail traders obsess over win rate. Professionals obsess over reward-to-risk.

At its core, the 2R Mindset simply means:

For every 1 unit of risk (R), the trade must offer at least 2 units of potential reward.

Mathematically, edge lives in expectancy. The basic expectancy formula is:$$\mathrm{<br>}$$E =  (WinRate ×  AvgWin) −  (LossRate ×  AvgLoss)

Notice what this means: you do not need to win more than 50% of the time to be profitable. If your average win is twice your average loss (2R), you can still be profitable with a win rate as low as 40%.

For example:

• Win rate = 40%

• Average win = 2R

• Average loss = 1R

Expectancy = (0.40 × 2) − (0.60 × 1) = 0.80 − 0.60 = +0.20R

That is positive edge.

Research in behavioral finance shows that retail traders often chase high win rates at the expense of payoff asymmetry. They take quick profits (0.5R) and l...

One of the most expensive mistakes retail traders make is assuming their strategy should work in all market conditions. Professionals know better. Every strategy has an environment where it thrives and an environment where it doesn’t.

If you don’t track performance by market regime, you’ll eventually abandon a good system during the wrong phase—or press too hard when conditions are unforgiving.

Academic research shows that financial markets alternate between persistent trends, high-volatility clustering, and range-bound conditions. The takeaway is simple: your strategy edge is conditional.

Example 1: Trend Strategy in a Chop Regime
Suppose you trade a breakout strategy designed to capture directional moves. During strong trends, performance is excellent. But when volatility contracts and prices oscillate within a tight band, false breakouts multiply. So do your losses.

Example 2: Mean Reversion During Strong Trends
A mean-reversion trader fading overbought/oversold levels may do wel...

Price action doesn’t respond to how confident you feel or how good your strategy performs. It responds to how volatile the market is at the time. Here’s a good rule to use:

High volatility = smaller size.
Low volatility = normal size.

That’s it. No crystal balls, just reality.

Many traders make the classic mistake to size trades based on conviction or historical performance. The problem? The market is unpredictable. It expands when it wants, contracts when it wants, and punishes anyone who ignores the changes in volatility. Position size is the key risk management tool. 

Here’s what works:

When volatility expands with wider ranges, faster candles, larger ATRs, cut size automatically. Sometimes dramatically. That should keep your drawdowns shallow and your emotions calm. When volatility contracts, return to normal size, knowing your stops are tighter and losing outcomes more acceptable

What doesn’t work is trying to trade “through” volatility with the same size. That’s how small ...

One of the most persistent mistakes retail traders make is treating support and resistance (S/R) as precise, surgical price levels. They draw a single horizontal line at a prior high or low, expecting the market to respect it to the exact tick.

But real markets don’t behave that way. Professionals understand something crucial:

👉 Support and resistance are zones — dynamic, flexible, and influenced by volatility.

This “breathing” behavior of S/R is not subjective. It’s observable in both market microstructure research and decades of trader experience.

Why S/R Behaves Like a Zone — Not a Line

1. Order Flow Is Not Concentrated at a Single Price

Institutional orders rest across ranges, not exact levels. Market microstructure studies show that liquidity providers layer orders across multiple price increments, creating clusters of buying or selling interest rather than pinpoint boundaries.

2. Volatility Physically Stretches and Compresses Levels

When volatility rises, support/resi...

While we can’t predict the future exactly we can approximate the future. Take price action for example. Price is either: 

1. Trending and volatile.

2. Trending and quiet.

3. Range-bound and volatile.

4. Range-bound and quiet. 

A complete trade plan would include different strategies that are in harmony with each of these market conditions. With that, you can align your working strategy with the current market conditions.

Knowing the present condition is easy, the challenge becomes which condition is next and when will it change? 

Technical indicators are helpful. Yes, most are lagging and we’re always looking for leading information but used skillfully indicators can help build your case for timing the change in market conditions. 

Bollinger Bands are a fabulous indicator for this purpose. They clearly display trends and volatility, the key data points to consider. 

In reading his book, Bollinger on Bollinger Bands, I found a pearl of trading wisdom that stuck with me, and I u...

Tuesday’s results: No trades suggested.

Today’s Best S&P Futures Turning Points: Buy 6023.75 stop 6018.00. Short 6134.25 stop 6138.50. 

The World Index: (+100/-100) remains at +29 with sentiment mixed but leaning Bullish on rising volatility. 

Catalysts: Jobless Claims @ 8:30. 

Quick Tip: Volume Leads Price

For as complex and chaotic as the markets can be, price chart traders only have 3 variables to analyze. Price, volume, and time. Most technical traders agree that volume leads price. 

Price moving up with volume increasing is very bullish. It’s hard evidence there is plenty of buying interest. Conversely, price moving up with decreasing volume is not as bullish. The buying interest is waning. 

Price moving down with volume increasing is very bearish. The selling interest is strong. Conversely, price moving down with decreasing volume is not as bearish. The sellers are weakening. 

How can you use this data? For tuning your entries and exits. 

If you’re a breakout trader and ...

Yesterday’s results: No trades suggested.

Today’s Best S&P Futures Turning Points: Buy 5909.50 stop 5904.75. Short 6134.25 stop 6138.50.  

The World Index: (+100/-100) plummets from +36 to -50 with most major world markets Bearish on rising volatility. 

Catalysts: GDP, Jobless Claims & Philly Fed MFG Index @ 8:30. Existing Home Sales @ 10:00. Kansas City Fed MFG Index @ 11:00. 

Quick Tip: Lead or Lag?

The never-ending challenge in trading is forecasting future price direction using lagging information from technical indicators. Better than nothing but you can do even better. 

Significant research has proven that there are two Leading Indicators of price that are not on the chart. Insider buying and Unusual Options Activity. 

Combining the two is the perfect addition to your stock/options trading plan. Learn how in our free training session. Click here.

Trade fearlessly,

Mike Siewruk

 P.S. Share in the wealth! Pass this blog along to your trading buddies. 

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 remaining. 

I recall listening to a trading instructor years ago explain Support and Resistance. He...

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 S&P daily chart right now, it’s up 250 points, 4.5% in three days. 

Seemingly “overbought” conditions can persist so fighting this...

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 to determine bullish versus bearish conditions. Basically, RSI ranges from 40 to 80 during...