Friday Jobs Whiplash, Monday Confirmation, and a Swing Setup I Like

*Bob Iaccino, Chief Market Strategist and Co-Founder of Path Trading Partners, joins us live every Thursday from 11am ET, as our risk management educator. With 30 years' experience working as an active investor in equities, commodities, futures and FX there are few better to talk on the subject of risk management.

Bob has developed a method for breaking down his key fundamentals of risk management, in a way that he thinks retail traders can understand and use to get actionable insights to bring into their own trading. Below are some excerpts of Bob’s thoughts from a recent live session.

Nonfarm payroll Fridays can feel like a roller coaster. Years of trading them taught me two things. The first impulse after the headline usually is not the real move. The second is that Friday’s direction is often not the path the market follows the following week. That is why I use Friday as reconnaissance and Monday as confirmation.

Going into this one, futures markets were already pricing in a very high chance of a rate cut at the next policy meeting. Recent central bank commentary leaned the same way, with several officials signaling that labor conditions and wages justify easing.

The jobs report reinforced that view. Payrolls missed, the broader jobless rate ticked up, and wage growth cooled. That combination supports the case for cuts but also whispers that growth is slowing.

When that mix hits the tape, you often get what we saw intraday: a fast drop, a bounce, and a lot of confusion. I do not chase that noise. I mark the day’s extremes and plan to let Monday tell me if buyers or sellers truly have control. Historically, when Friday reverses its first move, Monday tends to set the tone for several sessions. I want to trade that tone, not the noise.

My favorite confirmation tool here is a modified Percent B setup that lives on my TradeZero charts. The idea is simple. When the Percent B histogram drops below zero, I look for the next session to close above the prior close with an up candle. That gives me a high-probability long in a broad index.

I place my stop on a close below the low of the trigger day, not on an intraday poke. That close-only rule is the backbone of my process because it filters out the emotional wicks that jobs Fridays love to print.

This week, the tech-heavy index flashed that exact pattern midweek. If I were trading a basket, I would have entered near the close on the trigger day with size based on my dollar risk per trade. For example, if my stop from entry to the trigger-day low equates to roughly 3 to 4 percent, I scale share count so that a full stop still equals my fixed risk number. With TradeZero’s order ticket, it takes seconds to build that with a bracket that uses a closing stop plan. I also set a price alert on the trigger-day low so I know to evaluate into the close if we threaten it.

The market can sit a few percent off all-time highs and still feel chaotic. The cure for that fear is not predicting the next headline. It is sizing positions so you can survive being wrong. My average swing hold is about 26 days. That means I must be comfortable holding through several sessions that do not go my way. Since I keep my dollar risk constant, a wider stop simply means fewer shares. A narrower stop means more shares. Either way, the dollars at risk are the same.

TradeZero’s Risk Controls panel and the position calculator make that arithmetic fast, which lets me focus on execution rather than second-guessing.

Every Friday afternoon, I run the same routine in TradeZero:

1. Cull the list. I clear out any names that obviously lack a setup. No maybes.
2. Flag the potentials. I tag symbols where a setup could complete with one or two more candles.
3. Mark the levels. Entry zones, stops on a close, and first targets go on the chart with color-coded dashed lines.
4. Set alerts. I place alerts a touch inside my entry zone, another at the trigger price, and one at my close-based stop reference.
5. Prep orders. For the top one or two, I create staged OCO brackets that I can activate in seconds if price steps into my zone.

That routine keeps me from forcing trades Monday morning. It also lets me react quickly if Monday confirms Friday’s reversal.

Here is a structure I am watching without naming names. Think of a large warehouse club retailer that competes on price and membership value. These businesses tend to hold up when consumers grow more price sensitive. On the daily chart, price just completed a clean double-bottom trigger, popped toward short-term resistance, and now looks ready to offer a pullback entry.

How I would frame it using TradeZero:

• Entry zone: A pullback into the prior breakout band, roughly the midpoint between last week’s trigger candle and the first pop high. On my TradeZero chart, I bracket this area with two blue dashed lines and a price alert that fires as we enter the zone.
• Trigger: I do not buy the first touch. I place a buy stop a few cents above the top of that zone so price must turn up to fill me. That keeps me out if the pullback keeps sliding.
• Stop logic: Close-only below the recent swing low that defines the double bottom. I set an alert on that swing low so I can make the decision at the close, not on a midday flush. If you prefer hard stops, size smaller and accept that you may get wicked out.
• Target: The daily 200-day moving average is the initial objective. It is a natural magnet after a bottoming pattern and often where supply shows up. I paint that line green on my chart to keep it top of mind.
• Reward to risk: From the top of the entry zone to the 200-day, the ratio is roughly 1.3 to 1. If I get filled near the middle or bottom of the zone, it improves. If the pullback gets too deep, odds of stopping out climb, so I will skip a fill that happens near the bottom of the zone and wait for a fresh pattern.
• Time stop: If price spends two full weeks hovering between my entry zone and the stop without progress, I exit and recycle the capital. Stale trades drain focus.

In TradeZero, I save this as a template with a staged bracket: buy stop above the zone, profit target at the moving average, and a closing-basis exit plan managed by alerts. That keeps my clicks minimal when price is moving.

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