You see it occur: you look for a high-probability trade setup in which you have done well in the past. The market opens and the pattern forms—but you don’t enter the trade. Sitting at your computer as the price action begins to unfold, you watch as the stock does just what you anticipated, and it becomes an enormous winner. You are left frustrated with yourself for not performing as well as you might have on what could have been a game-changing trade.
There are many frustrations experienced by a trader, regardless of whether the trader is just starting out or has many years of experience. In fact, proprietary trading firms like SMB Capital have developed tools, strategies, and processes to guide traders out of this frustration. It all comes down to having a system that alerts you to potential trades and tracks market context in real time and prepares you for the fast pacing of the world of trading.
It is in preparation, using the right tools for identifying market context analysis of opportunities before they happen, and recognizing those moments for your strategic maneuvers. This can be achieved through specific strategies such as market scanning reports, real-time alerts, and having a clear process for tracking potential setups by traders to catch their best trades consistently and maximize profit.
Importance of Preparation
At its core, catching your best trades time and time again often just comes down to preparation. Often, opportunities pop up in a hurry, especially around the open. If you are not prepared or not paying attention, you can miss out. That is why a well-defined preparation process is important.
Some key considerations in preparing include:
- Being aware of market context: You need to understand what is going on in markets and whether the current market environment is conducive to your setup.
- Track specific stocks: Monitor names set to make big moves.
- Having a clear trading plan: Prepare to act on the trades with a pre-determined strategy, so you are not hesitant when the time comes.
Case Study: A Missed Opportunity
Let’s take the example of a real trade below and break it down to see how missing a key trade affects performance. The trade was a relative strength sector play in the semiconductor sector. On April 17th, a high-probability breakdown setup appeared in a stock called ARM.
It presented itself in the first 15 minutes of the market opening. The stock had been compressing below a key level and on the open broke down, generating a high-probability short trade. But he missed the most important entry, with the highest edge, even though he identified the setup—this was a trade that could have made the trader’s month.
It cost dearly to miss the entry, as it was a bread-and-butter type that she traded extremely well off of. Though she did eventually pull money from the trade, underperforming on a setup like this is unacceptable—not when it’s your core strategy.
Tools to Ensure You Never Miss a Trade
While avoiding missing future opportunities is important, building a process that prepares you for these kinds of fast-moving trades is going to be important. With these three powerful tools and strategies, you are more likely not to miss your best trades:
1. Market Context Tracking
How do you even know when to start looking for breakdowns or breakouts? Market context does play a very critical role in identifying when specific trades are going to tend to succeed more.
Two of the best tracking tools for the context of the market are:
- NASDAQ New Highs/New Lows: This tool shows new highs and new lows for different periods: Daily, weekly, monthly, and yearly. Monitoring this may indicate to traders how strong or weak the general market is.
- Breadth Thrust Indicator: Negative breadth thrust is characterized by a reversal wherein the market’s advancers vs. decliners go from extremely positive to extremely negative within a relatively short period of time. The chances are low, but when this indicator does flash, it might indeed be a very strong call for market reversals, especially on breaks.
Using these tools would help you better gauge the market trend and, hence, know when to start looking for your core setups.
2. Market Scanning Reports
Stocks that are getting ready to break out or break down must be identified, and this should be done using market scanning tools. After missing the ARM trade, SMB Capital also took on two reports to keep track of the potential opportunities for the traders:
- The Squeeze Report: This pre-market report names those compressing on the daily chart, meaning that stocks can be primed for a breakout or breakdown. That is where the most energy builds in those stocks to the point they are prime movers.
- The End-of-Day Report: Report those stocks that showed greatest strength, weakness, or volume at the end of the trading day. Focusing on the strength of traded stocks, you will stay ahead of moves.
Both reports allow traders to scan the market efficiently and track names that are ready to move.
3. Real-Time Alerts and Watch Lists
When you have identified some names that are setting up to break out or break down, the last thing you want to do is miss the actual trigger. Real-time alerts can make all the difference for this.
SMB Capital has the Team Market Filter, which monitors the key stocks and the interest level on each one. If any stock trades within an Average True Range given from the critical level, an alert in real time is pushed to the trader to be ready and in position to react when the trade hits.
This combination of watch lists and real-time alerts will make sure you’re always ready for when your key trades trigger, so you know when it is the right time to pull the trigger.
Conclusion
This is very frustrating because such an important trade goes missing. It all can be avoided if one prepares correctly with proper tools in place. Never miss your best trades when you are monitoring market context, scanning reports, and receiving live real-time alerts.
The secret to always getting your best setups is discipline, preparation, and technology. The trading world moves fast, but with a structured process, you can be there when the next great opportunity arises—to execute it.
If you wish to take your trading to the next level, consider adopting these strategies and tools to make sure you never miss your best trades again.