Today is Tuesday April 20th and the market continued in its reaction rally up from Fridays sell-off.

I did not look at any news that may have drove the market today, but there seemed to be some good reason for the market to drive higher. The pure technical picture said to play the momentum as the market turned higher at 7:40 am West Coast. Just before that it had come under a little pressure as the night trading had follow through from yesterdays close. The move at 7:40 was a clear take off point. I was not trading at that time, but wish I was because the price action was dismal after 9 am (12 noon New York time). A slow grind for the next two hours as volume dried up and traders patience was tested. Unfortunately I was one of them. I did OK but it took forever. Why I say to myself do I even trade that stuff. I guess it is because I did not get prepared for the early open.

I came up a little short of my daily goal. I did basically have it, but gave it one last trade and that put me under. Only trading small but I have time and room to give myself a break after last weeks monster gains from Thursdays session.

To be successful, we most often have to be our own coaches and talk ourselves through difficult situations. All traders should analyze there “Self Talk” to see if it lines up with there trading plan and objectives. If you find yourself not sure what you are looking for, that is a sign that you need to practice more and become familiar with what is going to take you to your goals and objectives. You do not have the luxury to get it wrong. On the job training is very expensive. If you pay for a course or become self taught, it is still going to cost you. If you go the self taught way, it is going to take you a lot longer to learn what you will need to bring it all together. It is possible and it is a option. I am a product of being self taught. I never bought a program, course or any other trading vehicle to get me where I am today. I may have been able to speed that up if I had, but maybe not. All trading courses are not the same, and the ones that don’t teach you how to actually read price action, but be dependent on indicators or any other thing, is going to slow you down.

All traders need to learn how to read supply and demand just by looking at a chart and be crystal clear on what it is saying without any doubt.  A trading course that falls short of accomplishing that is not the best route. There are times the market is right in between making up its mind on which direction it wants to go and that is when you need to pay special attention and listen to it.

Being a good trader, is knowing in advance what makes up good price structure and what does not. The stuff that looks like market noise, is what you leave alone. You don’t have to trade every twist and turn. Let the market set itself up to give you the trading edge . If you don’t have it, don’t try and trade it. You need to be at least 80% sure that if you put a trade on, that it is likely to go your way. If you don’t feel that you have that kind of a trading edge, leave it alone until you do. It is not worth it, for those who are trying to figure all of this out.

Often, the market is going to suck you in long, just when you think you got it, only to take you down. At those times, you can not afford or allow yourself to give up a lot of room. You will need to learn where the market is breaking away from you so that you can cut your loses short. If you don’t, you will be looking at 2-3 point loses in moments, which will be the next guys gains. Don’t do that.

Look at a chart and if you are a day trader, I would say a tick chart or volume chart. You will have the benefit of hindsight here, but this is good exercise for those who want to get better at timing. Forget about indicators and just look at the price bars. Since you have the benefit of looking at the chart after the fact, where do you think would be a reasonable spot to go long and short based on what you see. You probably will not want to place your marks at the very highs for short or the very lows for long, but within a reasonable margin, where would you like to have placed your order to capture a piece of the move. Don’t be greedy with the exercise, but be reasonable. Tomorrow I will give you an example of what I mean on the charts.

Ask yourself, how can I know the next time I see this set of price conditions that the movement will be similar?  There is a way to do that. It can be done with stocks, for daily price bars, futures emini contract or any trading instrument in any time frame. This is one way of teaching yourself. It will take a lot of practice and you will have to invest a great deal of yourself to find the patterns that will bring it in.

If you can afford it and want to jump start your training, I have just the tools, framework and structure to point you in the right direction to speed up the process. If you want to continue to go it alone, I offer small tips and hint of what you can do here in my blog, but never really get into the technical nuts and bolt of my trading method. You will hear me talk a lot about market psychology and how to overcome one of our biggest obstacles, us. So stay tuned or drop me a line, I am hear to help for those who want it.

Related posts:

1. Day Traders, read the current price action !
2. Part Two; “Mental Day-Trading Exercise”
3. Price Action Rules When Trading the Markets
4. Price Action Trading Defined
5. Trading with Time, Tick, Volume or Range Charts, which is better!

Tags: trading course, trading edge, trading exercise, trading goals and objectives