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MACD 12,26,9

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Important insights from one of our workshop participants this week:  a ton of good learning inside these ideas

Our initial stop placement reflects the information available when our trade is initiated. Any price action after the trade provides additional information and can be used to update the stop placement. An example is the use of the MACD histogram to exit before taking a full 1R loss.

If your system is designed to catch singles, don’t wait for the home run before exiting. Take the single and move on (until you can recognize when the market is making it obvious that this time you should hold on for more).

Markets may have unique characteristics that should be taken into account when making framing and trading decisions. DBA, for example, can be framed with tights stops, seems to make orderly moves, and sees more action only after the opening of the grain futures markets.

Framing trades with tights stops right after the open feels like getting caught in a dolphin hunt (the underwater tornado). The lunch and afternoon sessions tend to provide a better environment for identifying trades using the WMB method.

The importance of understanding the type of move you’re trying to capture (F –> C; B –> A), and matching your entries/exits with that type of move.

After learning how to trade large index ETFs (IWM, SPY…), index futures provide a way of using the same skills to produce higher returns. 

Respect the R.

Opportunities are available any time the market is open. 

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