May 17, 2011
- in Uncategorized by schooloftrade
Day Trading in the DEAD ZONE, profit from low volume moves
– Why do we watch CAD news?
o Canada is a large exporter of Crude
o I use the site ForexFactory.com to find the most important CAD-related news
– Big money Trigger Line (BMT)
o Tells us where to take profit
o Tells us where to avoid entry
o The BMT is considered the center of a major trading range
o We take profit at the BMT b/c we think the move will come to an end around the BMT.
o We avoid trading around the BMT much like a day trader would avoid the POC (market profile)
– Depth of Market for Crude Oil
o DOM are the levels of orders waiting to be filled
o Not to be confused with the orders on the tape
– How do we calculate profits?
– What’s the problem with very tight targets/stops?
o STOPS AND TARGETS need to be a calculated amount of distance
o The range of the market you’re trading
o The size of the contracts you’re trading
– 1 contract day trader looking for ATM strategy
– What do you consider LARGE Size on the Dollar Index?
o 5 contracts on the tape = big money on the DX
o This is not for all markets, just the illiquid Dollar index
o I consider lots of big money when I see 5 of the 5 lot orders (25+ orders at one time)
o Combine that with speed and we have an easy way of reading tape and reading speed to make educated trading decisions.
