Today is Tuesday May 11th, and the market seems to be catching its breath.

We were down slightly for the day on most of the index’s after making a run in the early session. There is a lot going on in the market and it seems to be trying to figure out what it’s next move is going to be.

There seems to be some renewed hope with the European bail out. The funny thing is, that it is our country’s money to a large extent. The way I read it, the bulk of the money is going to Germany and France to help with the Euro Dollar’s problems. Back in 2008 when the dollar had its problems , I did not see any foreign country’s coming to our aid.

I don’t want to get off on a tangent, but the foreign bankers are trying to save the Euro at all costs. It does not fit there plans for Europe and the World if the Euro fails, but the dollar can go into the tank without a wimper. There I go again. I try and not be political and I don’t mean to be, but this all has a pretty big impact on our markets. I don’t think our country can afford to spend the money they do without it coming to some sort of culmination.

At this time I can’t say when the day of reckoning is going to come, but it is, that is for sure. I don’t like to be pessimistic, but rather a realist. I am not afraid of looking for the truth as it stands. I know of many who would rather believe all is well and pretend it will all continue. The world is changing, that is for sure and to expect the status-quo is wishful at best.

Traders and investors need to diversify into other area’s of assets to safeguard themselves from the unexpected. What would have happened if the market continued to melt down at the pace we saw last Thursday into Friday. If there was a good enough excuse for the market to do that we could have seen a 2-3 thousand point decline in the Dow in a couple of days. I think we should not rule it out, but am not really calling for that now.

I heard someone say they heard financial guests say on the cable channels that this was a great time to buy? Well, maybe it is, but I don’t think I would be making any long term buying decisions right now. I don’t listen to CNBC or the news channels, as I got rid of my cable superscription over two years ago. I don’t miss it. Listening to all the experts on TV give there opinion was a little to much for me. That is not why I don’t have cable but it is a benefit, I don’t have to hear them. Most are wrong more often than not and well, I will just leave it there.

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In today’s trading I did pretty good, I had several trades and was going to quite early as I had my daily goal, but I have been trying to do some live video’s of the market action as it comes in, with commentary and an occasional trade. This is my second day of this and I do like it. I have heard from several of my students that they are learning more this way and I will try and keep it up to better help them reach a higher level within the markets. I will say, becoming a good trader does take time and commitment. The ones that really want it, will find a way to make it work. The thing is, if you have a good understanding of how the market really works and a solid trading method, it can happen much quicker.If you don’t, it could take many years still with no guarantee that you will make it.

If a trader puts time into the markets and is learning and focusing on the wrong things, it is not going to help him and often times will only hurt them. But how is a trader to know if what he is currently learning is of value or is a waste of time and money. Well, I can’t make any blanket statements because there are some good trainers and trading methods out there in the day trading world, but I think they are few and far between. I am trying to be different than the rest of the trading educators by giving a fundamental understanding of how trading really works.

Indicators are helpful for many traders, but it can become a crutch and hold good traders back from focusing on what drives the indicators, “Price”. The price always rules every time. If a trading program does not help traders to read the price as it unfolds, it can be holding you back. The markets are not random, they are very predictable, because people are predictable. The behavior of traders is no different that the rest of the population and that is why if you are able to get into there head, so to speak and know what they are thinking so that you can do the opposite, you will be on your way. Over time, you will not even have to think like that, because it will become second nature, (built into the price patterns).   If this, then that, period.

With all of that said, I have a video of my trades in my T-1 trade model. This is for short swings and scalp trades. Scalp trading can mean different things for different people, but for me it means 1 to 2 points, with an focus in the 1 point range. I take trades out of this model for more at times and still rarely ever risk more than 3 or 4 ticks on any one trade. Timing is the key and understanding when the price is going to move. When it doesn’t I get out. I don’t rely on indicators but read the price and the indicators seem to line up with my method, not the other way around. If anyone is interested, or has questions, please feel free to email me. I wish you all the very best.

Related posts:

1. Price Action Trading – Key to Long Term Success
2. Low Volatility Keeps Traders Away
3. Mentoring Traders
4. Day Traders, read the current price action !
5. Day Trading against other Traders

Tags: Euro dollar, scalp trades, Scalp Trading, traders, trading indicators