The best trade can sometime be no trade!
There’s a time to sit on your hands.
Sometimes the best trade idea is to simply turn off the monitor, pack away your pens and paper, and go relax for a long weekend. (UK Bank Holiday Weekend)
I am always long on US stocks; however, sometimes the market gets into a position when the risk to reward is not there.
I look to follow market momentum, ideally early momentum. Yes, there has been a lot of momentum since the 'JPY carry unwind' at the start of August, and S&P500 has shown us momentum.
Momentum usually comes in three stages:
Early momentum: the best time to enter.
High momentum: high RR trades.
Stretched momentum: be cautious.
Trading with momentum will always yield a higher RR, in my opinion, and my trade thesis is still in play.
So why stay flat? Jackson Hole Symposium! Usually, I’m chilled with economic releases, but this event’s making me take a step back for a few days.
In its most simplistic form, I believe the market is front running this event, less than 1% from ATH, a major level plus approaching short term stretched momentum.
The general assumption being that Fed Chair Powell will give the market what it wants, some warm words implying rate cuts. = liquidity and cheap money = buy everything.
This is good, right? Well, yes and no. Long-term, it’s great. Shorter term ‘buy the rumour, sell the fact’ is not great. The potential good news may be capped; what else can he say that the market hasn’t priced in? However, if JP is dovish or signals some caution, there could be a bigger pullback, skewing the RR on a trade.
Remember, the market moves in ebbs and flows. A quick visual look at the chart shows, SPX, doesn’t stretch too far from the 20 SMA before pulling back.
Avoid trading into major levels! One of my rules. I’ll be waiting for a clean break above 5675, SPX to pullback, and then looking for new momentum. OR a sharp correction, and again, wait for early momentum after the pullback.
Avoid FOMO, have your rules, and be confident. If the market moves 5% without me, so be it. I’ll wait for a pullback! Look for high-probability trades and avoid the stress of low probability.
Keep trading simple. Keep macro simpler.
Sometimes the best trade idea is to simply turn off the monitor, pack away your pens and paper, and go relax for a long weekend. (UK Bank Holiday Weekend)
I am always long on US stocks; however, sometimes the market gets into a position when the risk to reward is not there.
I look to follow market momentum, ideally early momentum. Yes, there has been a lot of momentum since the 'JPY carry unwind' at the start of August, and S&P500 has shown us momentum.
Momentum usually comes in three stages:
Early momentum: the best time to enter.
High momentum: high RR trades.
Stretched momentum: be cautious.
Trading with momentum will always yield a higher RR, in my opinion, and my trade thesis is still in play.
So why stay flat? Jackson Hole Symposium! Usually, I’m chilled with economic releases, but this event’s making me take a step back for a few days.
In its most simplistic form, I believe the market is front running this event, less than 1% from ATH, a major level plus approaching short term stretched momentum.
The general assumption being that Fed Chair Powell will give the market what it wants, some warm words implying rate cuts. = liquidity and cheap money = buy everything.
This is good, right? Well, yes and no. Long-term, it’s great. Shorter term ‘buy the rumour, sell the fact’ is not great. The potential good news may be capped; what else can he say that the market hasn’t priced in? However, if JP is dovish or signals some caution, there could be a bigger pullback, skewing the RR on a trade.
Remember, the market moves in ebbs and flows. A quick visual look at the chart shows, SPX, doesn’t stretch too far from the 20 SMA before pulling back.
Avoid trading into major levels! One of my rules. I’ll be waiting for a clean break above 5675, SPX to pullback, and then looking for new momentum. OR a sharp correction, and again, wait for early momentum after the pullback.
Avoid FOMO, have your rules, and be confident. If the market moves 5% without me, so be it. I’ll wait for a pullback! Look for high-probability trades and avoid the stress of low probability.
Keep trading simple. Keep macro simpler.
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