Alex's daily Market update & Focuslist (paid)

Market update & Focuslist - 06/19

Evening Market Update & Strategic Insights

Jun 20, 2025

∙ Paid

Thought of the day

Understanding Expected Value in Trading

Most new traders focus on setups, entries, and indicators—but what actually makes you money is understanding Expected Value (EV).

At its core, EV is the average amount you can expect to make (or lose) per trade over time.

Here’s the formula:

EV = (Win Rate × Avg Win) – (Loss Rate × Avg Loss)

This tells you:

If I take this same trade 100 times, what do I expect to make on average per trade?

Why It Matters

Trading is probabilistic. One trade means nothing. But 100 of the same trade? That’s when the edge shows up. And if your EV is negative, no amount of screen time or indicators will save you - you’re running a losing strategy.

How to Use It

1. Track your trades (win %, average $ win/loss).

2. Calculate your EV.

If EV is positive → you have an edge. Stay consistent and let it play out.

If EV is negative → fix something.

Are your losses too big?
Are your wins too small?
Are you just wrong too often?

Example:

Win rate: 40%
Avg Win: $300
Loss rate: 60%
Avg Loss: $100

EV = (0.40 × $300) – (0.60 × $100) = $120 – $60 = $60

That means you make $60 on average per trade. That’s a real edge.

Final Thought

Setups come and go. But math doesn’t lie. Every consistent trader you know? They’re running a positive EV system.

Focus on the math. Respect the stats. That’s how you build real confidence.

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MARKET ANALYSIS

/ES finds support at the 21dma-structure so far, with a potential undercut & rally off last Friday’s low pivot. Could this be the shakeout needed to finally fuel some broad buying and get out of that chop…we’ll see, but we’ll have an interesting day tomorrow! Ideally, we want to push above Wednesday’s high to confirm a daily reversal, but let’s first see where we open tomorrow.

Market Cycle Statistics (Trend > 21dma-structure):

Cycle Count (days): 39
10Y cycle average (days): 21.27
Z-Score: -+0.85

BREADTH

MCSI still downtrend below the declining 10dma, but Friday was a hook-up on MCO & ST breadth ext. With price right in the 21dma-structure, this is an interesting picture.