Hey guys, I'm completely new to trading—about a week in—just reading articles, watching videos, and absorbing whatever comes my way. I have a big question that no one has been able to answer for me, or maybe I just haven't dug deep enough yet. So, let me explain what I mean: I watched a video where a guy summarized all the major trading strategies. Most of them have one thing in common—you apply an indicator to your chart, set it up, and when the market behaves in a certain way, you either buy or sell. My question is: Why does the market behave this way? Am I misunderstanding the whole concept? Is it just a pattern that emerged over time, we observed it, and now we simply repeat it? Can you guys recommend any books or blogs that explain this in depth? I’d really appreciate your help. Best regards
Volume pushes markets up or down. Anna Coulling A Complete Guide To Volume Price Analysis Charting, if you study, can show topping/bottoming plus trending.
Try reading actual market news, not pundits on Social. Bloomberg has a lot of actual data on what is going on. You can get a much better feel on how the markets work AND much faster. Every article has some actual facts and usually an explanation. They have some analysis and-or opinion which you can evaluate AFTER you think about the facts of the matter. They have a 3 month trial for about $6. Read a lot there and then the Social-YouTube idiots will look like scammers and BS artist, which they are. Right now we are consolidating and redistributing after testing the high. As they say Risk OFF. That means a lot of large players are taking profits and repositioning for the next opportunities, up or down. These are the "patterns" you need to understand. The tactics on Social about trading are worse than useless, unless, you know what type of market you are in. Think having tools and materials, but not knowing what you are building or what phase the building process is in.
What you are looking for in either a pattern or an indictor is positive expectancy. A whole science has developed around backtesting in order to try and find positive expectancy before committing real money to the markets.
Book: "Trading in the Zone" by Mark Douglas. Here is a free copy I found in two seconds in a search, or just do your own search for it, or buy the book/audio. http://dl.fxf1.com/books/english/Trading_in_the_Zone.pdf Blog: Traderfeed.blogspot.com and anything else from Brett Steenbarger IMO, understanding trading psychology is the most important aspect for consistency.
Thanks for your replies so far. So I assume you get the patterns from reading the actual news. Right?
Thanks for your answer @AMWBadBoy Haven't posted for 11 years and now getting the honor Do you mean that you shouldn't let your emotions take over and instead stay objective and analytical? Or is there more to it?
If you buying a 5 lot of ES at 4:00 am, and another trader is selling 2000 lots of ES, you think market will stand still?
Of course. My 5 limit @ bid will absorb those 2000 market @ bid. Have you been paper trading all this time ?