Whenever we have a rough period, I go through the numbers. Especially after I launch an update. When I use these readings throughout the day, they are highly accurate, and I can’t wait to be able to offer them during trading hours.
However, we still have a great system trading overnight using the last reading of the day to gauge how the market may open the next day. Still, as you know, if the news or market is choppy, our system is not as strong. Yet, even when we are doing poorly, SPY is right over 65% of the time. When everything is in line, we see 80-90% and think we will never be wrong again. Which is never the case.
I have tested a large variety of pressure-type number readings. Over time and as data is collected, I adjust the algorithm. Some groups of numbers perform better at different times and situations. However, I don’t know which to follow and when (yet). So, I’ve decided to share three sets of numbers for all us to work with when deciding which direction to go. Currently, they are Purple, Orange and Blue Groupings.
Because there are, now, more numbers, I’ve added a new pressure number. This number is simply how many more up or down readings there are acress the three groups. Below, the black arrow points to 1 of the 3 new pressure numbers. The red arrow points to the original pressure reading (always positive). The blue arrow points to my interpretation of the numbers.
The numbers and recommendations are consistent overall. They are doing their job. The only recommendation which would have changed due to the additional data would be April 1, 2022 which would have read pressure up (which was correct). Using the new pressure reading, over the long term (over 100 trades), the average is about 75% correct using our rules.
Note: I have enough confidence now that I’m going to extend the time frame for the reading from the first 20 minutes to 30 minutes in the rules.
Some groups of numbers do run hotter at times, however, I really think I’m chasing my tail trying to figure out which are offering the best readings in different markets. All do stay well above 50%, however, Purple, Orange or Blue may be running 80-90% correct during a period of time, and you are more than welcome to trade off trends you see in the numbers.
You made find the pressure numbers with a different indicator, such as a technical chart signal as your winning combination. The options are endless.
Better Trading SPY Tomorrow
As much as I promote the pressure numbers, the winning approach is the style of trading we use with the pressure numbers as our guide.
When people day trade, many fail because they watch every second and often cut wins and expand losses. It’s common for pro traders to say, the less time they are watching their screen, the more profitable their trading. It at first sounds counter-intuitive, but if you think about it, it means there are fewer emotional trades.
This is what the SPY tomorrow approach does too.
With the SPY overnight trading system. You follow the recommendation based on the end of day Pressure reading, buy your options at the close, and sell in the morning.
Selling in the morning is really about your trading. You’re overall profitability is more related to management over time of your trading and position sizes. How you approach wrong days, and how fast you sell can still make a big difference in profitability. For example, today, SPYtomorrow said up, and the market went up first thing in the morning. However, I solid out in the first few minutes. A little patience (about 10 minutes) would have meant 3 times the profit.
There are times to hold, be patient, and times to cut quick. There are times to even considering doubling down (rarely).
My next video will be about more than the numbers, but how to trade the SPYtomorrow method. I will share my experience and best practices.
Let me know your thoughts about the new numbers.