I’ve noticed two very different ways people approach trading.
Some people are head down, learning how to trade. They study their trades, complete their reviews, look for weaknesses in their process, and they keep working to make better decisions.
They may want to trade full time one day, and they may have very big financial goals, but they aren’t making decisions today based on the life they hope trading will eventually give them. They continue building other sources of income and allow their results to show them if or when they are ready to make trading a larger part of their livelihood.
Then there are people looking for the trade.
What stock should I buy? Where should I enter? Where should I exit? What is someone else trading?
Their focus stays on P&L, making money quickly, and replacing their job. They are looking to someone else for the answer instead of learning how to arrive at an answer themselves.
Both groups want to make money. Both groups have big dreams.
The difference is what they are building.
One is building a skill, while the other is building a dependency.
If someone else has to keep feeding you trades, you may make money when they are right, but making money from the trade does not mean you have internalized the process and judgment that led to it. They can tell you what they are trading and explain why, but they cannot make every decision for you as the trade develops. Their decisions are also based on their own goals, risk tolerance, account size, and financial situation, so the same trade may not even be appropriate for you. When something changes, you have no process of your own to fall back on. You built confidence in their answers, but not in your ability to arrive at an answer yourself.
Real confidence doesn’t come from knowing your next trade will work. It comes from developing a mind and a process you can rely on: knowing you can analyze the market, form your own idea, make a decision, review what happened, and continue improving.
So ask yourself:
Are you looking for a trade, or are you learning how to trade?
One might make you money today. The other builds a skill set no one can take away from you, and that is what gives those bigger dreams a real foundation.
SPX Review and Outlook
SPX broke out of the larger May–July range at the end of July and has continued holding at higher prices. Right now, I see two main possibilities:
SPX is establishing a new higher range between roughly 7,630 and 7,774. We can continue rotating within that area before the next larger move develops.
The recent hourly consolidation was enough digestion, and price is already trying to start another leg higher. We broke out of the hourly range last week and made it all the way back to 7,774 before pulling back Friday.
The bearish scenario becomes more relevant to me if we start losing the lower part of this structure: first the 7,640/7,630 area, and then especially if selling continues toward and through roughly 7,614–7,600.
SPX Daily Chart
An Example of “Done Going Down”
August 20 is a good example of something I refer to in my own work as price looking “done going down.”
August 20 marked the low of the short-term decline. On August 21, buyers responded and price moved away from that low. Then on August 24, SPX came back down, retested that lower area, and held instead of extending to another low.
From there, price stopped behaving like it was in an active decline and started building horizontally. Price continued tightening before breaking out of that hourly range last week, which took us back to 7,774 on Friday, where we had several prior reactions. Price pulled back from there and is currently holding around 7,700.
SPX Hourly Chart
Levels for the Week Ahead
Around 7,700: This is the first area I’m watching. Holding around the top of the prior hourly range keeps another move toward 7,774 in play.
Above 7,774: A break and sustained hold above this area would open the door for another push into new all-time highs.
7,685–7,640: A pullback into this area would still fit the current structure. This takes us back toward the hourly consolidation and breakout area, where I’d look at how buyers respond.
Below 7,640/7,630: If price loses the lower part of this range and selling continues, I’d start looking toward 7,614 and the 7,600 area.
My Trading Update
This month, as some of you know, I’ve been working on increasing my position size, and doing so exposed some timing and execution issues. I sized up intentionally, but the larger dollar swings and overall drawdown made me look much more closely at where I was getting in too early, when I was staying in trades too long, and what I was expecting from the trade.
I’m scaling back a bit while I work on that, but this clarity has been a win for me. Sometimes a change in our trading doesn’t create the issue, it just amplifies something that was already there.
What are you currently working on in your trading process? I’m genuinely asking, and I respond to every email I get, so please catch me up!
Resources and how to work with me:
