July 29, 2011
- in Uncategorized by schooloftrade
Day Trading witout Volume & Tape Reading
If you trade overnight, or early in the US morning session, or when the Euro session is slow, you may not see enough speed and you may not be able to use tape reading to qualify the trade.
If you cannot use the tape, and there isn’t any speed, you then rely on your price structure and price pattern to trade for you.
Price Structure will tell you where the highest % trades will be, and then at those levels you then look for the price pattern.
Step 1 = Identify the price structure
Step 2 = identify the highs and the lows of this structure
Step 3 = think ahead of time…’what if price was to rise to here…what would I do’
Step 4 = wait patiently for price to come to the locations you defined in step #2 (highs and lows)
Step 5 = Wait for the price pattern to form at the level you defined in #2
Step 6 = enter the trade when the pattern triggers, making sure you use all of your rules.
Compensating Factors:
· trading with the short term trend.
· look for the same pattern on a different timeframe.
· different timeframes, different patterns, but SAME direction.
Setting up charts: please watch the Quick Start Guide, or email our support team.
Range Charts: I use range these for some specific reasons.
· make it easier to learn patterns
· easier to recognize patterns
Gold Contract Rollover: we trade the month contract with the most daily volume, and the 08-11 contract was less than the 12-11 contract so we jumped the 10-11 and went straight to the 12-11.
An agreement to buy/sell at a specific price in the future.
Example:
“Joe’s Japanese Furniture Imports”
I take my USD and I fly to Japan and i give them my USD, and they give me furniture I need to run my business.
If the dollar drops in value I cant buy as much furniture because the Yen will increase compared to my USD.
I need to hedge against a falling USD to protect my business.
I will buy GOLD as a HEDGE to protect against a falling dollar.
I lose money on the USD, but I make it back with the GOLD long position.
I will go out and buy a higher price for a more distance expiration to protect myself and hedge my USD position.
How many trades per day?
– scalper = 15+
– day trader = 8-15
– Fast Track = 5-8
When is the market too dangerous to trade? watch the video on the blog.
Which BMT is the strongest magnet?
usually its the slower timeframes, but when have slow and sloppy markets, anything can stall price action, and even the weak 4range BMT’s will hold.
AB=CD Pattern is used when you need to find the best profit target or your stop.
We usually use the support/resistance the market has to offer, but when we dont have that we use the ABCD pattern.
Example: Gold at the All-time Highs
3-strike Rule: This says that if we don’t fill our profit targets within 3 tests of the target we then move the target up/down manually to get it filled.
3 Signs of Price Reversal: look for these 3 indicators to tell you when price should be reversing.
Pace of Tape Indicator measures the speed of the markets.
Speed itself is a very strong indicator that you have never used before.
Fake-out Breakouts: we look for these at the extremes. use the 3 signs of a price reversal along with this.
Three Must-haves for day traders:
1. Must understand how the markets work
2. Must understand how people work with those markets (speed, tape reading, price action)
3. You must understand how you react to these markets (your emotions)
Books:
Market Wizards by Jack Swagger
Inside the House of Money (Hedge Fund)
Trading in the Zone, Mark Douglas
