Charles Pennison is a full time, at home trader who makes his living trading the Samp;P E-Mini contract. In my interview with him, we start with the big picture and we quickly make our way into the specifics of how he find good trades. He then talks about how he gathers a broad picture of the markets before diving into his daily trading.
Tim Bourquin: Charles, what is the most important thing you watch when you are trading?
Charles Pennison: Cycles. I really pay attention to cycles. You have the seasonal cycle, for instance, mid-March to mid-May is typically a bullish cycle in the market. Market structure meaning if you’re starting to get higher highs and high lows around mid-March, high probability trades would be in the long direction during that period. Then you get the monthly cycles and, of course, most people know about the end of the month bullish cycle when a lot of mutual funds and retirement funds are buying into the equity market. And then you have a shorter term cycle that I pay attention to first discussed by George Douglas Taylor back in the 1950. Back then, he calls it a three-day cycle, and back then maybe…
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