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Bull Volatile Regime

We knew this was coming, the volatility. 

If you are new to this game or been around for a while it should come as no surprise that markets can go from relatively calm and peaceful to extreme volatility quickly. 

The last part of 2019 and first month or so of 2020 was the Bull Quiet regime, which is low volatility, nice easy drift to higher price levels. It’s very easy to trade, you simply buy for any reason and hold because prices, even if they drop, will resolve higher in short order. This is when you as a trader, as long as you don’t get too cute with the sell button, can make the most and easiest money in the markets.  

As the saying goes, it’s easy to make money in a bull market, and the Bull Quiet market regime is exactly what they are talking about.  

What makes it even easier to make money in a Bull Quiet market regime is that we DON’T have a real market top happen in a Bull Quiet regime. This is important because knowing...

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What Is Prop Trading?

prop trading video Feb 15, 2021

I've been asked a bunch how to get into prop trading, so I made a Video

Enjoy 

http://bit.ly/2IbOTkc

 

 

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Live Trading and Bitcoin 10,000

crypto Feb 15, 2021

First of all I want to thank you for following along with my work, I've been trying to put out as much relevant content, that people have been asking for, as I can. 

This past month was a world wind for me, ending a 3 year(ish) stint as a nomad, traveling the world (with my wife), living in Airbnb's and trading. It took a number of years to convince my high powered litigator of a wife to give up the nice house, car, country club membership and all the *things* that she thought was important, to sell it all and travel the world in style. 

To be clear, we weren't private jetting nor were we staying in hostels or on some gracious hosts couch. We were in Aribnb's, the whole Airbnb not just a bedroom, and still working pretty much every day. So it wasn't a permanent vacation and it wasn't site seeing all day everyday, in fact as we were going through our photos from the last few years, we really didn't spend a whole lot of time visiting Instagram's best. 

It was our first...

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Volatile Regime March 8 2020

Last week I wrote about the Bull Volatile regime. As I always like to remind people the way that I categorize the markets is using a LAGGING indicator, the SQN (System Quality Number). The SQN is similar to the way a calendar works, it won’t tell you the temperature exactly every single day, but you have a general idea of if it will be cold, hot, rain, snow, dry, long or short hours of sunlight. 

 

That is if you are in Buffalo, New York in January, you are most likely to have cold, perhaps snow and more importantly you’ll know the tools you need to have handy for that month. Flip flops and a tank top are not to be considered, where as you wouldn’t even think of not grabbing your coat, wearing a sweater and likely your boots and gloves. 

 

The SQN is the same, it helps traders by giving you the general characteristics of the market regimes.

 

There are two parts to it, first the trend, Bullish, Bearish or Neutral. 

 

Being a...

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How Bull Volatile Turns To Bear Volatile - How To Proceed

Let’s talk about Bear Markets

Since this market chaos has taken hold, each week I’ve been covering each aspect of the different market regimes. Last week we talked about going from Quiet to Volatile and I touched a bit on the differences in bull and bear markets.

If we are to take the agreed upon (by whom) definition of a bear market, 20% below it’s high, then we are no longer in a bear market on a number of tickers, as we are no longer down -20%


Using that weird and entirely useless metric of -20% being a bear market, we should all go out and breathe a global sigh of relief because we are above the -20% mark on the Dow SPX and Nasdaq indices… for now, it could change in five minutes. 

I think we can all agree that this magic 20% number is entirely useless because what happens if we are -19.9% like we were in December 2018 on SPX, yet NASDAQ was down -26%...so yes and no on the bear market??? Kinda???

It’s great for headlines, and I’m sure...

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Shelter At Home Pandemic

pandemic Feb 15, 2021

Today I'm going to do something a lot different than I have recently, this post is not going to be about markets. 

A lot of people have been reaching out to me this past week about how to deal with the Corona Virus pandemic.

I have spent a large portion of my life as a corporate security consultant advising multi-national companies with very large and spread out global staff and assets.

I was VP and Director of Security for numerous large organizations in good and bad places around the world.

I protected very high level diplomats, heads of state, government officials, high net worth families and generally people who had a lot of reason to be concerned for their security, safety with very high risk repercussions.

In addition to trading over the years, Emergency and Disaster planning has been a large part of my professional life.

All of that is not to give you my quick resume, but to give you reason to trust what I share in this video so you can put it to work with your...

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Is this the bottom?

fbo fvbo strategy Feb 15, 2021

First of all, I love seeing you all taking advantage of this market chaos and social distancing and the 50% discount off the Backtesting Mastery course. I believe without a shadow of a doubt that the Backtesting Mastery course is the best course for any trader, new or experienced, to get to the level of consistent profitability. It's a simple methodology that not many people understand how to implement.

The questions I'm already getting from traders is fantastic! Proud of you all!

On to the real business of figuring this market out. 

Yesterday I was talking to a trader who was asking me if I thought the FBO setup on the daily ES chart was a valid trade. He correctly noted that it was an FBO and not a FVBO, the distinction is important. 

Using 1% risk (which is way too high to be using in this market in my opinion) you would need to have a $200k USD account to purchase one E-MICRO, not the E-MINI. You would need a $2 million dollar account to do it with an E-mini....

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Systems Trading - Learn To Build

One of my core concepts about trading is stacking edges. If you don't know what an edge is in trading then we REALLY need to talk! 

An edge is a quantifiable/statistical advantage with a certain asset class, a trading strategy or you yourself, as in you can focus incredibly well for example. 

When you can stack multiple and complimentary edges together, you can come up with some really powerful trading systems. 

One of the most important tools in my tool kit, is categorizing the market regime. If you've read any of my emails lately then you are well aware of what I'm referring to. 

Categorizing the market regime gives you valuable information about how the market is trading and you can then apply the appropriate trading strategy to the market instead of trying to use what worked 2 times last week (out of 10) or for the past few years. 

This market is completely different than that market, and it warrants a completely different strategy. 

The Vol...

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Backtesting Mastery

I hope you have been benefiting from these posts. 

I realize that for many traders, they've never experienced a highly volatile bear market like this. Well no one has experienced it like this, just like any other bear market, this one is different.

However there are characteristics of all bear markets that are the same. That means that there are systems to trade and generate income during these markets, just like there are ways in roaring bull markets. 

Ironically my trading has grinding nearly to a halt during this period. 

For most traders, who still have their accounts and didn't completely blow up already, the volatility is very enticing.

These massive intraday swings are something we haven't seen before, and for traders who don't understand position sizing, they see 5% even 10% intraday moves, not realizing that they could make big money with 0.5% or 1% if they had the appropriate strategy and more importantly sized positions correctly. 

Do you know how your...

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Alex Barrow and I Chat About Markets and Impending Lockdown

market regime video Feb 15, 2021

We've been busier than normal this week in doing some deep research on the characteristics of the Bear Volatile regime. 

We are working hard on it over here, collecting the statistics and I'll be working on putting it all together into a big report. It's important to be prepared with what to expect. 

In other news, Alex Barrow, CEO of Macro-Ops and I jumped on a call to chat about the impending lock down, government/military/security response and markets.

Have a watch, leave a comment, ask a question

 

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