The Surfer!:
The best explanation of a plan is "the surfer" who goes surfing. Goes down to the
sea. Checks the weather conditions. Is the surf up?. Is the breeze on-shore or off-
shore?. If the conditions are right, jumps on the board and paddles out 300 meters.And waits. Waits for the right wave. There are many waves. The key is to pick the right wave. Don't want to pick one too soon or too late.The choice of wave comesfrom seasoned experience. Not a surfing plan. A surfer does not go out surfing with a surfing plan in mind. The conditions of the moment on the day will dictate the play.Depending on the conditions, what was a good wave yesterday might well be a poor wavetoday.
So u see you need to check the market conditions first before even considering
to play that market or not!
Market conditions are important as u have to judge a market by its own action
but it aint easy to read a market condition where there are alot of gaps and
wild/crazy prints going on if it aint easy to judge the current condition of a market
it is nearly ,impossible to tell wether u have a weak or strong market infront of u
aswell as u have a to spot a market wich is in favour of your approach on trading andfits in our trading plan/approach.
if u only looking for breakout trades and the market doesent respect any of your keylevels as prints go wild all accross the ladder, then u dont have a chance to hinterpret the current action and all decisions u make are merly a gamble then
anything else..
remember u need to get as much odds in your favour as possible!
but if the market goes crazy and u are lost in tarnslation ie. cant paint a picturthe best possible position to take.. then the following saying comes into play
as if in doubt stay out ,
remember if the market doesent tell you a story .. dont trade !, only trade theobvious! (Even the strongest, most furious and fastest predators target only thelame, weakest and slowest prey. They preserve and maintain their edge. )
example..
if u have a market infront of u, where the money is scattered all accross the
ladder ie.. no tight and liquid market . its much harder if not impossible to judge
the quality of supply and demand and rather hard to position urself.. ie the odds
arent in your favour. as anything can happen on such a market..
btw. anything can happen even in a good market conditions but u cant rely on suchfreaky actions,
u want a market where there is a balanced spread accross the board of money, as only
then u can see if the layside is outnumbering backside or vice versa..
think of it as a battle beteween layers and backers who will win the battle ?
if u have equaly situations on first sight ie.. rather a balanced book situation..
but supply(backers) are loosing steam u know that u rather should lay then back..
but what if there is no crystal clear sign of that?.. due to a lack of money on ;themarket aswell as prints going off on both sides in the same wild manner ?
u cant judge a market situation based on such wild behaviour...
u need to have a both sides confronted with equalish amounts of money, then u willsee who will win the battle more likely.. who dries out on men.. or who overruns menwith more and bigersize
i mean its easy to take out 10 bucks when these are confronted with 100 bucks..
but does that really mean that u can speak of a strong market? what if the backers
just jump in a lil later? with 200?
but what if both sides are standing with 100 bucks?
what do u think the market does when 100 bucks vs. 100 bucks fight and one side geteaten up and another 100 bucks stand its ground at previous traded price..?
u see u need to have a balanced situation in order to make assumptions
in wich favour the inbalance will take place! u need to have the perfect conditions to be met in order to make the appropriate decisions..
aswell as if u have big players or mad bombers in a market u rather should stay out..if u dont know or couldnt read their intentions..`(more on hat in an article about games played on the ladder in a later article)
but think about that if u have an average size on markets between 1K and 2K ;but allof a sudden u see someone dropping 20K...would u want to trade such a marketwhere u dont have a clue whats the purpose of;such a move ?
i tell ya ,u rather dont take any trade after u see such actions..and skip the
market! as it will hurt u big time and there is no need to be in the market in such
situations..remember there will be always a another market .
;u dont have to trade but u can.;its ;a luxury not a must to be in the markets..u can skip markets if they dont fit ur criteria.. better stay out of a market ortrade ,then beeing in a wrong/bad one! the markets will be there forever..
also u want to trade liquid markets were u can get in and out with good size withoutany problems ,not illliquid markets where it goes crazy and its would be hard toget 50 bucks matched.. well sure u could adjust your betsize . but do you
really need to trade any market?
Here are some examples of Different Types of market conditions
the good the bad and the ugly!
Good:
tight market
A tight market is when u can back @best price and lay@best price are as close
together as possible (1tick) those are the most favourable conditions
where there is alot of liquidity present most of the time, and the battle wich is foughtcan be judged quite good.
High Liquidity
Good liquid markets is the base of a good market to trade.. meaning alot of
activity=opportuity , good size on bothsides .. = no problem to get in and out of a
trade , and good to read ..
Bad:
spread to Wide
on the other hand if u have wide spreads between the best back and lay price..uwillget bad fills if u need to get in or out of a market , such conditions are bad but on the otehrside.. it can represent some opportunitys aswell.. ie. market makingbut for trading as i do and show in here .. its not suitable ... as i trade with market orders ... not limit orders
Low Liquidity
poor liquidity is bad in manny ways.. u have crazy actions going on ie. the market
gets freaky/funky .. wich is hard to read , think of it of a book with missing words
or sentences! .. and ofcourse u will have a hard time getting in and out of trades..
when there is not enough size/ or traders/punters
Ugly:
volatility
high volatility is a twofolded sword, it can be good and bad . good if the big fast
moves occure in favour of your position and bad if they occur in the other direction
of your tarde.. however u have to be focused on size of bets.. if its small sized u
deffenetly dont want to bet bigger amounts.. or else u wont get in/out.
those conditions should only be considered in an advanced state of your trading
career.. as its pretty fast and u need alot of experience and a good psychological
background + discipline to trade such market profitable..
however there are also bad volatility markets where prints and bets go all over the
place.. dont consider trading or read something out of such markets , avoid them
like a plague.
Mad Bombers:
If u spot MadBombers and huge bets showing up on the market u should get out
immediately and skip the market for good! .. as the markets can act pretty wild ifsuch an order hits the market.. and they can push/pulll markets quite wild arround..and if they remove such orders.. it can get wild agian.. and u dont know if theythrow in such size again! .. so better stay out if u spot such an action and skip to the next market
