Successful trading is often a matter of selling at the right time. It is often possible to be a conformist and just follow the crowd. When there is strong interest in what you are trading, you can merely follow the prevailing trend. As prices move up, the media reports on the optimism, and the confidence of the masses rises. Soon, more and more enthusiastic buyers enter the markets. There are times when all you have to do is ride the wave. That said, following the prevailing trend doesn't always work. As we have seen, periods of optimism are often followed by periods of fear and pessimism. You cannot always "buy low," wait patiently, and assume that there will be crowds of naive amateur buyers ready to push the price up higher. If you wait too long, you'll hit so-called resistance, and it will be too late to profit from the move. Obviously, trading is not always easy. You must gauge the phase that the market is in, anticipate what will happen next, and enter and exit a trade at optimal times. You must do your homework, rely on your instincts and make educated guesses as to where the markets will go next. Many traders make the mistake of assuming that they can merely look at the trend and trade on impulse, with little knowledge about what they are trading and what makes it move, but astute traders do their homework. They study the history of a company or a market, the range of prices and the factors that influence the rise and fall of the price. By doing your homework, you can better anticipate how the price will move. For example, you can determine what others see as support and resistance levels. You can determine whether the current price is the result of various market factors, or seemingly for no discernable reason. By knowing all you can know about what you are trading, you will ultimately take less risk. When you buy at typical levels of so-called support, you know that in the long run it is likely that prices will return to that point in a worst-case scenario. When prices go beyond that range, and you know there is no sound reason for the increase in price, you will know to sell while the masses are interested. And when they sell out of fear and prices drop back to their previous levels, you can buy back. It's possible to make money on the way up and on the way down. It's all a matter of knowing as much as possible about what youâre trading to the point of becoming an expert. Trading is much like sales. You have to know what the public thinks they want and when they want it. You need to buy at low prices and sell it to the public when the price is high. Just like in any business, however, you can't make such forecasts without knowing what the price patterns look like when the public is going to come in. Don't trade on impulse. Do your homework and make sound educated speculations. It's less risky and more profitable.
This is 2010, the public in the mkts as far as "TRADING" is concerned equals= MOX NIX. It is well known the public the public is always late to the punch bowl, but that tidbit will not help you be a better trader or investor. The public in general can be excused for being late because they are busy doing what they do for a living in their regular professions. No one can really fault some Dr, Lawyer, Nurse, pipefitter etc by sending some bones to a so called professional financial advisor to enhance his/her retirement plans. The institutions call the shots more and more these days, the shorter the time frame, the more influence they have...........DUHH!!!! they have the bucks to trample everyone else. Just look at Fridays trading, yes it was "quad witch" and i do not pretend to understand options influence on expirations but i do know how to read and understand the subliminal vibes from a chart. The ES was drawn toward 1150.xx as a test or something to do with the expiration, whatever. The point is, it was not the public looking at 1150.xx as the days magnet ...it was the institutions going down there...........WHY, i do not know or even care......but what i do know is at 1150.25, a single tick before the days magic number, the 1150.00 was defended and thats all you needed to know. Forget about what the public is thinking, forget about what anyone besides you and yourself is thinking. Learn how to "THINK INSIDE" of the chart and the world is your oyster. Ok, back to weekend fun.... for starters... http://www.sebringraceway.com/12hr_forms.lasso PS: that endurance race starts in an hour, 1000 est. Next week, F1 at melbourne, Aussie. great stuff.
You have it Mr. Hoggy. 1150's trade had some very dynamic BUY set up indications on Friday (in addition to the 1150.00 options play pricing level). The sell off down to the 1150.25's perfectly cleaned out all the last held LONG inventory in the June ES contract (LONG inventory was used up for those SHORT to cover profitable positions into.....LONG holders were turned into the weaker hands). Once the known resting supply was used up by smarter money players, it was SHORT covering rally move to the close (for those SHORT who missed covering into the last available LONG inventory supply). http://www.charthub.com/images/2010/03/20/FulcrumTrader_CD_ESM10 BTW, the day started right out of the cash session open with a very good sell signal.............. http://www.charthub.com/images/2010/03/20/FulcrumTrader_CD_ESM10_2 .......yes, a major SHORT inventory neutralization sell signal. Friday was a very interesting day indeed as both "edges" of the days range were capped by major "supply & demand" based order flow events. Weaker hands were cycled right out of the market in the JUNE ES contract Friday prior to the initiated moves of the day. This is very typical of markets that do nothing more than trade back and forth between known zones of resting inventory. Hey Hoggy, F1 is going to be FUN this year.......I saw Schumi out in Vegas a few months ago (he was shifter cart racing......LOL!) and he was his typical "all business" self. I wished Mika would come back to F1 again also......I miss those two battling it out in F1!!! MIKA ROCKED!!! http://www.youtube.com/watch?v=e5h-HTv9d4c
There is still a fair amount of held LONG inventory that is somewhat underwater this morning in the ES, from those who bought the 1050's/1051's on Friday. Out of the cash session open today look for trade back to the 1052's minimum, this will allow those still holding LONG inventory to book out clean any remaining held positions from Friday's lows prior to any potential sell off. This should be a very interesting morning out of the cash session open, and I will also be watching where the Dollar is at as the markets kick off today.
Trade to the 1152.00 level at a minimum worked out well for those LONG prior to the US cash session open. http://www.charthub.com/images/2010/03/22/FulcrumTrader_CD_ESM10 That was a good LONG trade set up and we have had excellent follow through to the 1160's so far.