Did not place a trade on Monday or Tuesday, found a viable entry today and it worked in my favor.
But before I go into my trading results for the day and how the market reacted to Netflix ($NFLX) earnings overnight I want to give a primer on how I trade. This being the reason that you read my blog.
If you are a new or a struggling trader and you don’t have a system that consists of an Edge or Rules to manage your trade then you are gambling and relying on luck to make money from the markets. Without a system you are flying blind and I can only imagine the level of frustration you are feeling with this business which seems so difficult to wrap your mind around.
The reason you are struggling are twofold:
You don’t have a system, or even if you do, you don’t trust it.
You haven’t accepted the probabilistic nature of trading.
I have written multiple articles on here about these topics, if you are new or a struggling trader I would read them thoroughly. You will get an idea of the changes you need to make from a struggling trader to one that consistently makes money from the market.
Let me now show you what I see on my charts and this should give you a very good idea of how you can do the same.
I have a primary setup, called the Cusp Strategy or Cusp Trade. I came up with this myself years ago and this edge works well on trending days when the potential to make a lot of money is in the trader’s favor.
If you look at the chart of NQ (Nasdaq Futures) above, blue bars, from today, you will see the bars dip or touch the 50EMA and bounce off forming a cusp. This works going long or going short as you see on the chart - orange arrows. And if you look at the ES chart gray bars on top of the page you will see the potential entries a trader could’ve taken today in ES futures.
Trading can be as simple as this, but it only seems simple and our minds will tell us to do a million things other than take the right action when trading. But I would work on patience, never losing more than R1 on a trade and R2 for the day and not caring about your trading results on a day by day basis but more so on a month to month basis.
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