With RUT accelerating to new highs and the SPX lagging — is there an opportunity for a mean reversion pairs trade? I believe so. The probabilities are high for mean reversion. But, the danger of a mean reversion trade is the possibility of being too early. That is where options can give us additional edges. With options we can “lean” one way … Read More
What is a Counter-trend Trade?
The counter-trend trade has been the trade of the year thus far in the market. The trade is expressed via a long position in the SPY after a down move to recent support. The idea behind this trade is the market has a strong underlying bid and when it pulls back to a prior support level buyers will step into … Read More
High Beta, High Probability
It is my belief that for a short term trader to reach the upper echelon of their profession they have to have an extensive playbook. As we train and watch new traders develop we have found that those who become profitable master one or two of their best setups. The few that go on to further success become very good … Read More
Can a Smaller Stop Carry More Risk Than a Large Stop?
Thinking about stops in terms of probability and expected values.
Another look at randomness
Another look at randomness in the market