March 9, 2011
- in Uncategorized by schooloftrade
Avoid First Trade Losses by Planning your Trades and Trading your Plan
Questions for 11am EST:
– How to avoid early losses in the day, first trade losses
o How do I avoid taking a first trade loss and having to dig out of a hole?
o Define where you want to be trading for that day
o Find the overhead resistance, support below, channels, wedges, sideways ranges.
o This is EASy, the HARD part is waiting for it.
o Once the price gets to you, make sure momentum lines up first, and look for multiple timeframes to confirm.
o Look for overbought momentum for short trades, and oversold momentum for long trades.
o Remember that we may NOT get to enter at the desired location, but we may get some FEEDBACK from the market, which will give you a clue to what to do next.
o Use your rules to get into the trade with confidence, and remember that if your rules do NOT line up correctly, this is another sign of the trade you should take.
– Which levels do we look for trades around, and which levels do we avoid trades around?
o Avoid: OPEN/CLOSE, BMT, Trend Lines, middle of range, Big Round Numbers
o Use these: HOD/LOD, PHOD/PLOD, Swing highs/Lows
– Price gets very unpredictable around 930am EST when the markets are open
– People make unexpected trades based on price action around the US market open
– 925am will be as late as I go, and there MUST be a good reason for that trade.
– Did the 915am alarm have anything to do with the
– Best Momentum Indicator:
o JJMomentum uses multiple timeframes to confirm when they are BOTH pointing up (green_ or pointing down (red)
– Next week is OPEX, and its QUAD witching, very difficult week of the year
– What if the market is very slow again tomorrow?
o Stay away from slow speed on the markets you trade
o If you must take a trade with slow speed, look for compensating factors
o Size of the orders
o Momentum confirming over multiple timeframes
o MACD indicator on the 4range chart
– Opex is the 3rd Friday of every month
o Then 4 times a year (end of the quarters) we have 4 different asset classes expiring at the same.
o This causes the markets to trade very erratically
o It happens 4 times a year
o Professional traders will plan their month around it.
o March 18th is Quad Witching this month of March
– Best times to trade OVERALL
o Asian = 630pm EST
o London = 3am EST
o US = 930am EST
Worst times to trade:
– London Lunch (500-600am EST)
– US Lunch = 1230-230pm EST
– Before the Asian Open and after the US Close (430-630pm EST)(this is when electronic markets close, and you can get stuck in an overnight trade)
