The first half of 2019 is in the history books and, after solid gains in the first quarter, stocks and bonds added to the bullish trend in Q2. Crude Oil was little changed and Gold was a bright spot as the commodities market saw mixed action over the past three months. Lastly, many interesting stories were told in the currency markets, including a 220% surge in Bitcoin.
Time for earnings. Several large banks release results on Friday, and the floodgates on first-quarter reports open wide the following week. With the S&P 500 up sharply year to date, the rally will be tested when companies discuss the outlook for the remainder of 2019.
Here's why that matters.
After experiencing losses last year, almost every asset class is moving higher through the first quarter 2019. Stocks are rallying. Bonds are bid. The dollar is up. But the biggest gains have been in the energy sector, including a sharp rebound in the price of Crude Oil.
We say it often — trading is all about your risk-to-reward ratio. In this trade, Brad M. from Chicago nailed going long Nasdaq ($NQ) futures and riding one contract for more than 100 points and $2,296.04 in profits. That's something worth celebrating, right Brad?
Coach Dan breaks down Brad's trade, placed on July 17, in this week's episode of The Trade. Coach Dan goes over what Brad saw, how he executed his trading bias and what price level he targeted and where he might have gotten out of the trade if it went sideways.
By looking at what Brad saw at the time, Dan outlines what happened in the market and what you can learn and take into your trading.
The best part about trading being 23 hours a day is that it can present opportunities at any point in the day. For many traders that trade futures part-time, that means that the market is there when you have the time to dedicate.
But you still have to think through your trade. And in this episode of The Trade, Coach Dan Hodgman breaks down a trade by funded trader Evan L. in Colorado. On June 18, as rumors of tariff and trade disputes stirred, Evan took a short position in the Nasdaq. In that trade, Evan made more than $1,500 in real profits.
As Coach Dan outlines, everything that Evan did, he nailed spot on — from his use of market dynamics to a target that matched perfectly with major trend lines. In one of his more in-depth analysis, Coach Dan also breaks down other levels in play, as well as additional places that traders would have be "right" to take profits.
Nasdaq futures ($NQ) are one of the more volatile trading instruments. In fact, many traders might think that keeping a sub-10 point stop in them would be a challenge not worth taking. Yet, as we know, more risk does not equal more reward. And Z.S., one of TopstepTrader’s more than 170 active funded traders, proves it. Looking to make just 10 points as his target, he has to keep his stop lower, set at just six points.
That doesn't leave him much room for error, which means that he has to be very choosy with his entries. And he has been, averaging more than $100 in profits on every trading day — winning and losing days included.
While Z.S. points out that he still has a lot to learn, he also has seen success. A look at his approach may help new traders fine tune their own.
Futures traders have a lot of information to process in order to make good trades. How are correlated markets performing? What is the long-term trend? What is the trend for the day? But one thing that they may overlook, even as equity futures traders, is earnings reports.
Yesterday offered a prime example (pun intended) of why futures traders have to be aware — and get out of the way of — of major earnings reports.
At 3 PM CT, Amazon reported earnings. Three minutes later, the Nasdaq moved 80 points... $1,600 on one contract.