Your expectations of the market need to match reality.

Soup explains it perfectly. (Yes, soup…)

Look, I don’t know about you, but when I hear the word “soup,” I think warm, comforting, hearty.

So imagine my surprise the first time I tried gazpacho … and it was ice cold.

My immediate reaction: I spit it out. 

But the truth is, gazpacho isn’t bad. It’s actually really good. It’s just different from what I expected. 

My expectations didn’t match reality.

The same thing happens in trading. If you come to the market with unrealistic expectations (like thinking you’re going to make 1,000% in a few weeks), you’re setting yourself up for disappointment.

And that disappointment can lead to frustration, bad decision-making, losses, and even total failure.

But when you have realistic expectations (like aiming for small, consistent gains over a realistic time frame)…

You’ll have a way better chance of beating the market. 

How To Frame Your Mornings

What’s your expectation of the market before it opens?

That’s what you should consider every morning. 

If you start your day saying, “The market needs to do X for me today,” you’re doomed. 

It’s the worst possible mindset to have because you can’t control the market. 

And since you can’t control it, you shouldn’t have any expectations of it.

It will do whatever it wants. Your job is to respond. 

The Open-Handed Approach

So what’s the best approach?

Come to the market open-handed. “Hey, it’s going to be whatever it’s going to be.”

No expectations. Neutral.

And that can be difficult. We have hope. Desire. We want success. We want to win. We’re biased. We have ego.

Subconsciously, we want control. And we have a mental bias to expect positive outcomes.

Positivity’s not a bad thing. But positivity in a negative situation can be. That’s like sailing a Hobie Cat on the high seas with 10-foot rollers and wind in your face saying, “No need to turn around. It’ll all work out.”

But maybe it won’t all work out. Maybe the risk is too high. Maybe you should just keep the boat in port.

This is why we need a different mental approach in the morning:

We are flexible in our expectations, rigid in our rules. 

Do you have rules in the morning? What will get you in or get you out? 

What makes you say, “Yes, this is the type of market I want to participate in,” or, “No, this is not”?

I’ve been using one extremely simple guideline to answer this question in my own trading…

1 Morning Question To Help Your Positioning

Here’s a rule for trading in the morning…

It starts with a simple question: Is the SPY above or below yesterday’s close?

If it’s above, I look to the bullish side. I’m not saying I’m only going to go bullish, but that’s where I look. 

If it’s below, I look to the bearish side.

That’s it. Is it above or below yesterday’s close?

I use the previous close as a line on my chart. 

If the price starts off below that line, I’m looking for a rejection up for the downside. If the price is above that line, I’m looking for a bounce to the upside.

By using this line as your goalpost, you can set your expectations to match reality.

You won’t be shocked by eating cold soup.

My 4 Favorite OMEN Setups 

Here are the four juiciest setups from my OMEN Scanner this week:

CHWY April 2 $26 Calls

Chewy crushed earnings this week. Now, a post-earnings run is setting up. The scanner lit up with short-dated $26 calls all day Tuesday, including a $1.74 million order right into the close. Somebody knew something … and now they’re betting on further upside. 

Entry levels: over $26.15, back at $25.80, $25.60, or $24.60.

AOK April 17 $42.50 Calls

This conservative SPY ETF got some nice Smart Money action on the $42.50 calls. Big size to open interest at the ask with sweeps. $472,000 total. Potential stage 1 to stage 2 breakout (if it gets over $40).

Entry levels: over $40, or pullback to $38.50 (where Smart Money entered on Tuesday).

MMM April 17 $148 Calls

Multiple repeater bets, at the ask. Big size, $1.01 million, where there was zero open interest prior. Drop, pop, run, rest pattern. Could break above the 200 simple moving average (SMA) on the hourly chart.

Entry levels: over $148.50, or pullback to $146.70 (prior support).

GFS May 15 $55 Calls

This stock got about $2 million in May $55 calls, where open interest was only 33 contracts. Now over 7,395 open interest. Broke above resistance yesterday (and held it).

Entry levels: over $48 (key resistance), or pullback to $46.05 (where smart money got in yesterday).

How To Trade These Setups

If you’re tired of trading feeling like a high-stakes casino where every move churns your stomach and every loss makes you question your entire existence, I want to show you a different way.

That’s why I’m hosting a LIVE 2-day Bootcamp March 31st – April 1st at 12:30 PM EST.

I’ll walk you through the low-stress options system I’ve used for over 20 years. The same system that’s allowed me to live free from financial stress in Florida with my wife and three kids.

It’s not sexy. It won’t make you rich overnight. And that’s the point.

But it will help you build a personalized trade plan that fits your life and helps you, so you can quit stressing and get back to living.

We don’t live to trade. We trade to live.

WARNING: NO DEGENS ALLOWED

Be good (and be good to others),

Ben Sturgill

*Past performance does not indicate future results