how to approach trading in general

how to approach trading in general


well u need to emphasize that each market and each new event is different then the one before!no market is the same as the one before or the next to come... there is no black and white!however the underlying market mechanics and principles dont change , they are always the same..the market reflects those principles just in a different way each time ... based on liquidtity,volatility, average

volume etc. it just comes in differnt shapes forms and size but the mechanics behind what u see are still the same..
and how to interpret the current market action.. is just a matter of experience.. and the basic logics i describe on this blog

u need to know that setups and trading opportunitys wont play out picture perfect all the time.. as there is no exact situation then the one before ,even if it looks like it is in first place .. there is always an uncertainty ,any thig can happen within the next few minutes or seconds or even a blink of an eye.
u never gonna know if someone throws a big size bet and scares the market etc..or something similar crazy thing happening ,but u have to act in such a situation the right way and this is a just a matter of reading the action correctly , with the basic laws in the back of your head , it will sink in and any new situation will be read correctly and therfeore the action u take or not , will be because of the current sitaution and not because of pre biased views or actions.. u will adobt t each new situation ...

the market is a ever changing beast u cant force into simple patterns.. wich do occure from time to time but thats just a part of that chaotic behaviour... notice its not random.. its chaotic if u know that there is a cause for each move u know what might be the next most likely action to take place.. but its not 100% sure... nothing is but we are not here to predict the future , but to put as the odds in our favour and participate.. what the market does next is not in our hands , but when to exit is in our hands and that should be as soon as there is a change in behaviour in progress , wich will develpoe again depending on the actual situation.. u will notice that sometingis cooking or doesent seems rihht .. for a open position etc.. as u have watched the market till this hapened..

aswell as u need to know that u have to find the perfect market situation in order to decide if its tradeable or not..ie.. u need to see if the markets talks to you.. or not..

u know ,there are bad and good market conditions and u simple have to decide if the current market is tradeable or not depending on alot of factors , wich includes your approach on trading wich have to be met in order to be successfully aswell as the market ,believe it or not , will often throw out almost crytsall clear signals in wich driection it will go or if a certain level will hold or break , and then u have to trade the obvious scenarios .. where the market litteraly begs you to take a certain trade .. this is where patience pays out .

only trade the obvious! if in doubt stay out.. the market can act pretty unpredictable from time to time ;).. and if u cant see anything or read the market comfortable.. then by all means stay out!

u will know when to trade or when not or when the market gets freaky.. etc..
and u will know when u can act uppon the action as u have interpreted .. then u can take a trade.. and even then the tide can change within a second.. so u have to stay flexible.. either scratch or change direction of a trade (wich would be more advanced)

so basically

u have to get the actual market situation right and the conditions to your trading style have to be matched u need to get the odds in your favour .. (the more the better)..
u have to trade the edges not in bewteen , only on key levels
u need to trade a size where you feel confident...

Stay Tuned for Breakouts , Bounces and more... ;)

Read More

How To Read The Market

Here is a step by step example on how to read the markets and act accordingly
using all illustrated points (as for now) on my blog..

in this example u will see:

How to draw the key levels
how to use them correctly
how to read the actual situation
judge the quality of demand and supply
Buying vs. selling pressure
how and when to position yourself
when to exit

Read More

Where to Spot Key Levels

Before u trade a market u need to draw a map ie. on wich levels u want to do buisness in

why?

because u need a reference point in order to start somwhere .u cant simply turn on the ladder and start trading right off where ever price trades atm..

this will hurt u.. as u better not trade in an area where price rotates heavily
u want to trade the edges and only after u see how prices move there and how it reacts there.. this is much easier than trieng to trade in between those levels..

u need reference points , from wich u start to analyse and judge the current situation and act acordingly

those levels arent randomly picked , you can look at the current price chart and draw in resistance and support levels , swing highs and lows





then u can use the tickchart on the ladder to determine the next levels
of support , resistance , range,swings etc..





u also need to keep price levels in your focus where there where heavy activity and low activity.. ie. acceptance and rejection





aswell as keep an eye on big prints and where they occure, this levels may also be important ,when price touches them again or trades torwards them..





however remember that the levels arent one particular price but sort of areas .its not to the tick accurate.. but can also be 3 ticks wide etc..

also note that a previous important level may have no meaning the next time we visit the level as sentiments and desicions etc .. from participants change aswell..

for example a trader may layed a big amount on the market and price comes back to that level but now it falls thru that level with ease..

means, yea there where heavy activity wich indicated buying.. but that was just temporarz of whatever reason...

could be that the trader had a back position on the whole time and was only taking profits.. etc..

just an example that u need to keep in your head that important levels may not be important the next time...

u need to watch how price approaches those levels and how it acts on this levels and act accordingly...

examples on trade setups will follow.. and how u use those levels to judge the market and take action or not ..

we differentiate from major to minor levels.. where the major ones will rather be respectet then the minor ones

from top(major) to bottom(minor) :
charts = support/resistance/swing highs and lows
Tickchart = support resistance swings
Tickchart/marketProfile* = ranges channels / market profile*
ResentPrints= last traded Size!

*will post something about market profile soon

Read More