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.

If you have my checklist then you know that before you put on that trade, you are confirming that you can appropriately size your position instead of just putting it on. 

Today however, the range is tight enough that you only need a $100k account to buy 1 MES contract

If you have backtested the FBO strategy in a Bear Volatile regime then you'd know if you should take this trade or not, and how big of risk you should put on. 

For me, it's a no go because the risk/reward is too skewed. 

However this is where the greatest trades of all time happen, when it's not easy. 

My thoughts here are I'm not going to put any money to work until my strategies can be sized appropriately and I have setups that perform appropriately to the market regime. 

Bitcoin, the setup worked out just fine

Bitcoin is in a neutral regime, FBO and FVBO outperform in those regimes. That's the nuance.

If you are taking this ES FBO long understand that you might be risking 5,10% even higher by buying just one contract. 

This could be one of those Christmas 2018 bottoms and rip everyones face off, bear market rallies are the most violent. 

I put up another video about what governments are looking at to mitigate the pandemic, have a look, share it with your family and friends. Be armed with the knowledge and not fear. 


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