Identify the Trading Day Ahead of Time With This Proven Technique

– Determining if today will be a challenging day

o News events

 Events today

• Anything late in the day today
• FOMC announcement
• Meeting minutes
• Fed chairman speaking

 Events later this week

• Is there anything end of the week people may be waiting

o Check the Dollar Index

 Are we trading inside or outside of the previous day’s trading range?

• Inside day = trading range is within the range from the previous day
• Inside days = narrow price action
• Outside day = trading range is outside of the range from yesterday
• Widening price action, larger moves

o Determine the personality of the market

 Consistency is the key
 8am = the markets are slow and flat
 10am = still slow and flat
 1030am = more volume, but still no patterns
 1100am = lots of volume, lots of movement, and new patterns everywhere!

o What do I do next?

 Ive determined that I have a nasty day ahead…what do I do?

• New traders move to DEMO
• Trade smaller size
• Look for double confirmation

o Use multiple timeframes to confirm momentum, pattern

• DO NOT walk away from your charts, stay and listen and keep an eye on the change in personality

– Why do we focus on the edges (extremes), and avoid the middle?

o Because that is where we have the support/resistance to help our trade
o We avoid the middle because there is NO buy/sell pressure in the middle

– 3-strike rule

o One of my favorite tools for scalpers
o Used for any type of trading, but best used for the higher risk, faster timeframe trades
o Check the blog:
o If my profit target is tested (not filled) 3 times, I will no longer wait for the fill, I will FORCE the fill

 Move that target up/down to get it filled

 If this happens on our 1st target, you will have risk in the market still, so you need to move your stop to entry

– Compare the YG and the GC

o GC = gold full size
o YG = mini gold (lower cost/tick, and less volume)

– How do you read the dollar

o How do we use the dollar?

o 13-range on the dollar
o Draw my trend lines, prep for the market the EXACT same way!
o I don’t trade the dollar because of its low volume
o Use the correlation because it’s the ONLY true fundamental correlation

o Dx-Pattern, a trade pattern using the dollar index

– Fast Track on inside day

o Inside day = higher risk
o Inside day = narrow trading range
o Inside day = higher risk for fast tracks traders b/c you are leaving your orders on the table ahead of time.

– Scalping and maximizing the runner

o Im a self-proclaimed intra-day scalper
o Scalper = tight stops and a quick target
o Intra-day = im looking to hold my trades to the highs/lows of the trading range, look for runners.

o Step 1: use multiple timeframes (review this every morning at 745am EST)

 Show you where the MAJOR levels of support and resistance are

o Step 2: look for scalping entries, with the goal of getting into just 1 or 2 big runners

 Example: use your 4 range for a scalping entry on crude oil
 We know the first two targets

o Step 3: plan your final target using your slower timeframe
o Step 4: hold the trade as long as your indicators tell you

 3 signs of price reversal

– Do we use the open/close of cash/PIT?

o I watch 24 hours a day, looking for overnight highs and lows, and things that happened while we were sleeping

o Do want to know WHEN the markets PIT open so I can expect the spike in volume.
o What times do we watch?

– What’s the difference between the E-mini’s and Crude/Gold

o E-mini’s are range-bound markets

 Sell highs, buy the lows

o Commodities are breakout markets

 Buy/sell the breakouts
 Sell the highs and buy the lows just like other markets
 I find commodities give me more opportunities with less waiting and watching.

– Does my trade size always stay the same?

o It does unless I have something go wrong

 Notice the market is getting really choppy I may cut my size in half
 When I get another $1000 new equity in my account I will add 1 more contract

– Inside day

o Are there markets that are better or worse?

 Worst = e-mini b/c they go completely flat
 Runner-up = currencies because they are closely tied to the dollar

 Best = commodities b/c they are breakout markets

o What should we be preparing for the most?

 Watch the personality change during the day to tell you when to start/stop trading

o Afternoon session different?

 Yes, you can but watch the personality
 If the market is bad in the morning, the chances of it getting better in the afternoon is VERY low.

– Sideways ranges, Trend line, channel, wedge, horseshoe’s, which is the most important?

o Check the blog:

o Sideways ranges are most important, they offer the highest percentage opportunities, with the lowest amount of risk

o Wedges and Channels are easy to trade with
o Horseshoe patterns will be the most dangerous because we’re using OLD trend lines in the equation.

– Overnight trades

o This method works on any market, any timeframe, and anyone can learn it.
o My favorite overnight markets

 Aussie
 Yen
 Gold
 Crude Oil

– Scaling in or scaling out of trades

o I do not scale in

 Adding to your position as the market moves in your direction

o I always scale out

 Taking profit as the market moves in your direction