Tag Archives: Volatility

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Daily Meeting for Thursday August 1

Posted on by Conor Browne

Navigating Volatility and Strategic Trade Execution

• Market Reaction and Volatility: Discussed recent market volatility and sharp movements, speculating on potential triggers like significant economic events.

• Trade Direction Decisions: Shared experiences of choosing trade directions, with participants explaining their rationale and outcomes for selecting up or down trades.

• Use of Moving Averages: Highlighted the use of different moving averages (14-day, 21-day, and 35-day) and the importance of consistency in applying these tools.

• Backtesting Critique: Ernie expressed skepticism about the effectiveness of backtesting, emphasizing real-time adjustments and understanding market behavior over historical data.

• Mental Toughness and Consistency: Emphasized the importance of mental toughness, disciplined decision-making, and maintaining a consistent trading routine to navigate volatile markets.

• Advanced Trading Strategies: Discussed advanced concepts like asymmetry in trading, the edge provided by trading with the trend, and the importance of stacking small edges for long-term success.

Summary

Ernie and the participants focused on recent market volatility, noting the sharp movements and speculating on potential triggers such as significant economic events. The discussion included shared experiences of choosing trade directions, with participants explaining their rationale and outcomes for selecting either up or down trades based on their analysis.

Ernie highlighted the use of different moving averages, such as the 14-day, 21-day, and 35-day, stressing the importance of consistency in applying these tools to trading strategies. He also expressed skepticism about the effectiveness of backtesting, emphasizing the need for real-time adjustments and a deep understanding of market behavior over relying on historical data.

The session emphasized the importance of mental toughness, disciplined decision-making, and maintaining a consistent trading routine to navigate volatile markets effectively. Ernie discussed advanced trading strategies, including the concept of asymmetry in trading, the edge provided by trading with the trend, and the significance of stacking small edges to achieve long-term success.

Overall, the meeting reinforced the need for strategic trade execution, real-time market analysis, and the development of mental toughness and consistency to navigate the complexities of volatile market conditions.

Archive, Retrospective

Sunday Retrospective for July 28

Posted on by Conor Browne

Developing Mental Toughness and Strategic Consistency in Trading

• Consistency in Trading: Emphasized the critical goal of achieving consistent profitability and trading at a professional level by mastering drawdowns and minimizing losses.

• Mental Toughness: Highlighted the importance of mental toughness and disciplined decision-making to avoid significant losses and manage trades effectively.

• Profit Management Framework: Discussed the profit management framework, including the importance of staging trades and having exit strategies ready to protect profits.

• Market Structure and Volatility: Analyzed recent market behavior and structural levels using volume profile to identify support and resistance zones.

• Technical Analysis and Execution: Explained the significance of technical analysis, particularly volume profile, in predicting market movements and informing trade decisions.

• Routine Development: Stressed the necessity of developing and adhering to a consistent trading routine to enhance decision-making and manage market changes effectively.

Summary

Ernie emphasized the importance of achieving consistent profitability and trading at a professional level by mastering drawdowns and minimizing losses. He highlighted that the first step towards this goal is learning how to control the drawdowns in returns and avoid significant losses.

Ernie discussed the importance of mental toughness in trading, explaining that disciplined decision-making is crucial to managing trades effectively and avoiding large losses. He introduced the profit management framework, which involves staging trades and having exit strategies ready to protect profits when certain conditions are met.

The meeting included an analysis of recent market behavior, with Ernie demonstrating the use of volume profile to identify key structural levels such as support and resistance zones. He explained how these levels can inform trade decisions and help traders navigate market volatility.

Ernie also emphasized the importance of developing and adhering to a consistent trading routine. He advised traders to establish a routine that includes regular reviews of trades, adherence to strategic plans, and readiness to adapt to market changes. This consistency in routine helps enhance decision-making and manage the dynamic nature of trading.

Overall, the session reinforced the need for disciplined trading practices, effective risk management, and the use of technical analysis tools to achieve consistent profitability and navigate market dynamics successfully.

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Daily Meeting for Wednesday July 24

Posted on by Conor Browne

Enhancing Trading Consistency Through Process and Patience

• Importance of Process Over Performance: Emphasized the significance of focusing on trading processes and consistency rather than short-term performance results.

• Weekly Performance Submission: Discussed the idea of submitting weekly performance results alongside the methodology and process used to achieve those results.

• Market Volatility and Risk Management: Addressed recent market volatility and the importance of managing risk through strategic trade entries and exits.

• Routine and Consistency: Highlighted the need for a consistent trading routine, including a thorough morning routine for mental and physical preparation.

• Technical Analysis and Volume Profile: Explained the role of volume profile in identifying key market levels and making informed trading decisions.

• Personal Accountability and Engagement: Encouraged traders to engage more, seek feedback, and share their trading results and processes to foster improvement and accountability.

Summary

In the daily meeting held on July 24th, Ernie stressed the importance of prioritizing trading processes and consistency over short-term performance metrics. He addressed a suggestion from the lounge channel about creating a separate channel for posting weekly performance results, emphasizing that these results should be accompanied by the methodology and process used to achieve them to provide meaningful insights.

The discussion covered recent market volatility, highlighting the importance of managing risks through strategic trade entries and exits. Ernie reiterated the necessity of maintaining a consistent trading routine, including a comprehensive morning routine to ensure traders are mentally and physically prepared for the day.

Ernie provided detailed explanations on the use of volume profile in technical analysis, showing how it helps identify key market levels and make informed trading decisions. He also discussed the need for traders to develop mental toughness and the benefits of personal accountability in trading.

Participants were encouraged to engage more actively, seek feedback, and share their trading results and processes. Ernie assured that he would provide quality insights and constructive criticism to help traders improve and achieve long-term success. The session concluded with a focus on fostering a collaborative environment where traders can learn from each other and continuously refine their strategies.

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Daily Meeting for Friday July 19

Posted on by Conor Browne

Leveraging Market Insights and Routine Mastery for Strategic Trading

• Trade Setup Reflection: Reviewed recent trade setups and the importance of following the telegraphed strategies, emphasizing the need for patience and proper execution.

• Market Volatility Analysis: Discussed the significant increase in market volatility, particularly noting a 35% rise in the VIX over the past week.

• Trade Management Techniques: Addressed strategies for managing trades in high volatility, including adjusting trade widths and using smaller assets to manage risk.

• Volume Profile Utilization: Demonstrated the use of volume profile to identify key market levels and make informed trading decisions, emphasizing its persistence over time.

• Technical Analysis and Indicators: Explained the use of technical indicators like candlestick patterns and their relevance in conjunction with volume profile analysis for better trade execution.

• Risk Management and Routine Development: Emphasized the importance of establishing a consistent trading routine, logging and journaling trades, and managing risk through strategic adjustments based on market conditions.

Summary

Ernie reviewed recent trade setups and stressed the importance of following telegraphed strategies to capitalize on market opportunities. He highlighted the significant increase in market volatility, noting a 35% rise in the VIX over the past week, which presents both challenges and opportunities for traders.

Ernie shared strategies for managing trades in high volatility environments, advising traders to adjust trade widths and consider using smaller assets like the MES to manage risk effectively. He demonstrated the use of volume profile to identify key market levels and emphasized its persistence over time, which helps in making informed trading decisions.

The meeting also covered the application of technical analysis, specifically the use of candlestick patterns alongside volume profile analysis. Ernie explained how these indicators can provide valuable insights for trade execution, though volume profile remains a crucial tool.

Risk management and the development of a consistent trading routine were key themes. Ernie underscored the importance of logging and journaling trades to review and refine strategies continuously. He encouraged traders to establish a routine that includes assessing market conditions, understanding volatility, and making strategic adjustments to maintain a controlled risk environment.

Overall, the session reinforced the need for disciplined trading practices, thorough market analysis, and effective risk management to navigate volatile market conditions and achieve consistent profitability.

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Daily Meeting for Wednesday July 17

Posted on by Conor Browne

Market Volatility and Mastery of Trading Routines

• Market Volatility Insights: Discussed the overnight Globex market downturn and its impact on implied volatility and trade setups.

• Trade Execution Strategies: Analyzed the morning market movements and identified optimal points for entering trades, particularly during pullbacks.

• Technical Patterns and Analysis: Reviewed patterns of lower highs and lower lows in market behavior, using these observations to inform trading decisions.

• Risk Management and Strategy Adjustments: Emphasized the importance of strategic patience, waiting for significant moves, and managing trades effectively to mitigate risks.

• Educational Discussion on VIX: Provided a detailed explanation of the VIX calculation, its history, and its implications for market sentiment and risk management.

• Tool Utilization and Development: Highlighted the use of trading tools and calculators, including a detailed demonstration of a risk-to-reward helper table for evaluating trade setups.

Summary

In this daily meeting, Ernie addressed the implications of the overnight Globex market downturn, noting its impact on implied volatility and how it influenced the setup for morning trades. He emphasized the importance of patience in trade execution, advising traders to wait for significant market moves and pullbacks before entering trades. Ernie reviewed technical patterns observed in the market, such as lower highs and lower lows, and how these patterns can inform strategic trading decisions.

The session included a detailed educational discussion on the VIX, explaining its calculation, history, and relevance to market sentiment and risk management. Participants engaged in a practical demonstration of trading tools, including a risk-to-reward helper table that assists in evaluating the viability of trade setups based on their potential risks and rewards.

Ernie also highlighted the importance of developing mastery over trading routines, emphasizing the need for consistency and continuous learning to navigate market volatility effectively. The meeting concluded with an open forum for questions, allowing participants to clarify doubts and enhance their understanding of the discussed strategies and tools.

Archive, Retrospective

Sunday Retrospective for July 14

Posted on by Conor Browne

Strategic Insights and Adjustments in Anticipation of Market Volatility

• Premonition and Market Outlook: Ernie shared a vivid premonition of everything “going up in flames,” hinting at significant market and societal upheaval in the coming months.

• Market Behavior and Volatility: Discussed the recent lack of market reaction to significant political events and the potential return of increased volatility, which could benefit trading strategies.

• Economic and Political Influences: Analyzed the impacts of global liquidity, economic reports, and political decisions on market stability, with a focus on the Fed’s attempts to manage a “soft landing.”

• Trade Management Techniques: Addressed questions on trade execution, particularly around capturing exit values for options and using specific trading platforms for managing trades.

• Tool Development and Utilization: Discussed ongoing enhancements to trading tools like the Playbook and Zero DTE Oracle, aiming to improve trading efficiency and decision-making.

• Adaptation and Long-Term Strategy: Emphasized the need for traders to adapt strategies to market conditions, maintain low risks, and focus on long-term consistency and incremental PNL growth.

Summary

In this Sunday retrospective meeting, Ernie opened with a personal reflection on a vivid premonition suggesting significant upheavals in the market and broader society. He noted that despite recent significant political events, the market has shown little reaction, but he anticipates a return to higher volatility, which could present new trading opportunities.

The discussion delved into the broader economic context, highlighting how global liquidity and the Fed’s efforts to engineer a “soft landing” are impacting market stability. Ernie expressed skepticism about the Fed’s ability to achieve this goal, suggesting that more significant disruptions may be on the horizon.

Participants asked questions about trade management, particularly on capturing exit values for options and managing trades on various platforms. Ernie provided guidance on using tools like Thinkorswim and discussed the complexities involved in executing trades, especially under low volatility conditions.

The meeting also covered the development and utilization of trading tools such as the Playbook and Zero DTE Oracle. Ernie emphasized the importance of these tools in improving trading efficiency and making informed decisions. He encouraged traders to focus on incremental improvements, risk management, and maintaining a consistent approach to building their PNL over the long term.

Overall, the session underscored the importance of adapting to changing market conditions, leveraging advanced tools, and developing a disciplined, long-term trading strategy to navigate potential volatility and achieve sustained success.

Archive, Retrospective

Sunday Retrospective for Sunday July 7

Posted on by Conor Browne

Evaluating Market Structures and Volume Profile Mastery

• Volume Profile Techniques: Emphasized the importance of marking up volume profile lines and understanding their implications for support and resistance levels in market trading.

• Trade Execution Strategies: Discussed the procedures for using TradingView for analysis and Thinkorswim for trade execution, ensuring efficient workflow and minimizing unnecessary work.

• Market Timing and Volatility: Highlighted the significance of timing in market entry, especially between 9:30 AM and 11:00 AM when market volatility is typically higher.

• Use of Indicators: Detailed the use of horizontal and vertical lines in volume profile analysis to mark high volume nodes and low volume wells, helping traders identify key market structures.

• Routine and Habit Formation: Stressed the need for developing a daily routine for market analysis, including pre-market checks, economic report reviews, and continuous practice of volume profile analysis.

• Tool Utilization and Improvements: Discussed using TradingView’s real-time data feed for accurate analysis and the potential integration of new tools to enhance trading efficiency.

Summary

In the Sunday retrospective meeting, Ernie focused on the critical role of volume profile analysis in trading, demonstrating how to mark up volume profile lines to identify key support and resistance levels. He emphasized the importance of using TradingView for analysis and Thinkorswim for executing trades, ensuring an efficient workflow without duplicating efforts.

Ernie discussed the significance of timing in market entry, particularly between 9:30 AM and 11:00 AM when market volatility is typically higher. He provided detailed guidance on using horizontal and vertical lines in volume profile analysis to mark high volume nodes and low volume wells, which are crucial for understanding market structure.

The meeting also covered the necessity of developing a daily routine for market analysis, including pre-market checks, reviewing economic reports, and continuous practice of volume profile analysis. Ernie highlighted the importance of consistency and habit formation in achieving long-term trading success.

Additionally, participants discussed the potential for new tools and enhancements to improve trading efficiency, with Ernie stressing the importance of staying updated with real-time data feeds and integrating useful tools like TradingView for comprehensive market analysis. The session concluded with a reminder to log and journal all trading activities to evaluate performance and make informed adjustments.

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Daily Meeting for Friday July 5

Posted on by Conor Browne

Post-Holiday Trading Insights and Strategy Adjustments

• Market Reflection: Discussed the mixed signals from economic reports and the implications of government versus non-government data, highlighting the challenges in interpreting market movements.

• Volume Profile and Volatility: Reemphasized the importance of volume profile and volatility in trading strategies, including techniques for measuring changes in the VIX and adjusting trading plans accordingly.

• Trade Management and Rolling: Addressed questions about rolling options contracts, clarifying that rolling essentially involves closing one trade and opening a new one, and discussed when it might be appropriate or not.

• Trading Fundamentals and Mental Toughness: Stressed the importance of mastering fundamental trading skills and developing mental toughness to make consistent, informed decisions.

• Future Trading Education: Planned future sessions to cover basics of futures trading, addressing participants’ fears and providing comprehensive understanding of different futures products and their applications.

• Consistency and Habit Formation: Highlighted the need for consistency in trading practices and the development of effective habits to achieve long-term success.

Summary

In today’s meeting, Ernie and the participants reflected on the post-holiday market conditions, emphasizing the challenges posed by conflicting economic reports from government and non-government sources. Ernie underscored the importance of using volume profile and volatility measures to inform trading strategies, explaining how to assess changes in the VIX and adjust accordingly.

The session included a detailed discussion on rolling options contracts, with Ernie clarifying that rolling involves closing an existing position and opening a new one. He advised against using rolling as a crutch to avoid taking losses, advocating instead for evaluating each new trade on its own merits.

Ernie also stressed the importance of mastering fundamental trading skills and developing the mental toughness necessary to stick to a consistent trading plan. He emphasized that success in trading requires a deep understanding of the basics and the ability to make tough decisions based on sound analysis.

Participants expressed interest in learning more about futures trading, leading to a plan for future sessions to cover the fundamentals of trading different futures products. Ernie concluded the meeting by highlighting the importance of consistency and the development of effective habits, drawing parallels to high-performance sports and other disciplines where mastery of the basics is key to long-term success.

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Daily Meeting for Thursday June 27

Posted on by Conor Browne

Strategic Discussion on Market Volatility and Trading Adjustments

• Market Volatility Concerns: Discussed the challenges of trading in a market experiencing low volatility, affecting the width and profitability of trades like the ‘Batman’ strategy.

• Trade Adjustments and Decisions: Explored personal trade adjustments due to market conditions, including the choice of narrower trade widths to save costs, resulting in mixed outcomes for participants.

• Debate Impact on Markets: Anticipated the potential impact of a political debate on market behavior, with special attention to logistical disruptions in Atlanta due to the debate.

• Low Volatility Trading Strategies: Highlighted the importance of making quick, small-profit trades in a low volatility environment, emphasizing risk reduction and fast decision-making.

• Volume Profile Importance: Stressed the critical role of volume profile analysis in trading, especially for understanding market structures and levels respected by the market.

• Open Forum Feedback: Conducted an open forum for participants to share their experiences and adjustments in strategy based on recent market behaviors and Ernie’s teachings.

Summary

The daily meeting led by Ernie focused on the nuances of navigating a low volatility market, which has been challenging for traditional trading strategies. Participants shared their experiences with adjusting trade sizes and strategies, such as the ‘Batman’ setup, to adapt to the sluggish market movements. Ernie emphasized the importance of recognizing small profit opportunities quickly as a viable strategy during these periods. The discussion also touched on the broader impacts of external events like political debates on market conditions. A significant part of the meeting delved into the importance of volume profile analysis in trading, illustrating how this tool helps in identifying key market levels and structures. Feedback from participants revealed a growing understanding and appreciation of this analysis technique, which many acknowledged had improved their trading outcomes. The session was also a platform for traders to voice their observations and learn from each other, fostering a collaborative environment for strategy refinement and personal trading growth.

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Daily Meeting for Wednesday June 26

Posted on by Conor Browne

Daily Strategy Discussion on Market Entry Timing and Volatility Adaptation

• Revisited Market Entry Methods: Discussion on improved precision in market entry methods, resulting in consistent small profits over the past four days.

• Volatility and Market Entry Timing: Addressed the role of market volatility in trading strategies, with emphasis on optimal entry times (between market open and 10:30-11:00) for best opportunities due to volatility.

• Use of LVL/LVN and Structural Market Elements: Introduction of Low Volume Levels (LVL) or High Volume Nodes (LVN) as critical elements for timing market entries, providing support and bounce-off points for trades.

• Live Trading View Analysis: Real-time analysis and demonstration of recent successful trades, emphasizing the role of structural support in decision-making.

• Discussion on Gamma Risk and Trade Management: Insights into managing gamma risk in a low-volatility environment, including strategies for quicker decision-making to lock in early profits.

• Feedback and Strategy Adaptation: Open forum for participant feedback on recent trading strategies and discussion on personal adaptations, highlighting the importance of continuous learning and strategy refinement.

Summary

This daily meeting, focused on discussing refinements to market entry methods that have shown profitability in recent days. Ernie emphasized the importance of understanding and utilizing market volatility to determine optimal entry points, specifically advocating for entries during the most volatile market periods. The discussion also covered the strategic use of LVLs or LVNs, which serve as indicators for potential bounce points, enhancing the timing of market entries. Ernie used real-time trading data to demonstrate these concepts, reinforcing the discussion with visual evidence from recent trades. Additionally, there was a robust dialogue about managing gamma risk in different volatility scenarios, stressing the need for fast responses to market movements to secure profits. The meeting concluded with an interactive feedback session, allowing participants to share their experiences and adapt strategies based on the discussed principles, underscoring the dynamic nature of trading and the need for constant adaptation and learning.