Take Your Trades to Obedience School

And whether you like it or not, you'll open that session sitting on losses, which will detract from your narrow focus on other trading opportunities. The best path when caught on the wrong side of the tape is to take a deep breath and deal aggressively with the matters at hand. After the fires are put out, reconsider how you want to collar the rest of that session.

Execute your collaring strategy by adjusting position sizing, scaling and holding period. These three elements will handle just about any type of environment -- from a raging bull market to a midsummer chopfest. Of course, each one affects the risk attributes of your overall portfolio or trading account, as well as the positions picked up that day or week.

Risk increases as a function of your time in the market. The odds you'll lose money increases geometrically the longer you hold onto a position. With this in mind, the most relevant time-control decision you can make in this tough June market is whether or not to hold a position overnight.

PowerShares QQQ Trust (QQQQ) 15-minute chart eSignal

That's especially important as we head into this afternoon's FOMC rate decision. The day after a Fed meeting routinely triggers a reversal of the trend that closed out the prior session -- usually through an opening trap. This market bias heightens risk on positions bought or sold today in anticipation of a beneficial move into the end of the week.

Position sizing and scaling also comes into play when initiating collaring strategies. Specifically, your risk exposure needs to adjust dynamically to the evolving ticker tape. Trade large-size when risk is low and opportunities abound and small-size when confusion and conflict control the ticker tape.