Today is Monday August 2nd and what a nice day in a perfect world as the Dow, S&P and Nasdaq markets put in solid gains across the board, with +208 on the Dow, +23 points on the S&P and +40 points on the Nasdaq.
If one went only by the news, everyone should be short as things don’t look or sound good on Wall Street. If you uncover the numbers, they are not that inviting, but we don’t trade numbers, or reports, we trade stocks and index futures.
I have been calling for a significant rise in the market for some time now and have been saying that the surprise will be coming from the upside. That is unfolding very nicely. I am sure there are bears, now running for cover. Those are the smart ones, cut your losses early. The ones who just know that this market has to go down, will be the ones who really feel the pain. It could be financial ruin for many as they hold on and on, just waiting for this market to turn, with hope slipping through there fingers each day. Pride, has often been the financial ruin for many traders and investors. When you enter a trade, you have to know exactly how much pain you can accept before you enter and never move your stop to a worst position. Justification, will soon be the thing that starts to kick in, as traders and investors will not throw in the towel, admitting they were wrong.
In addition to calling the larger overall moves by the market, I said in yesterdays blog posting that we would see 1115 on the S&P Emini futures in the early morning session. It could come in the night trading but a move to that area was very likely in the morning session. Well, that again, is exactly what happened. The market pushed up to 1115.50 and backed off that exact number by 5.25 points. The next part was for the market to continue higher from there through out the session and that is just what we saw.
In today’s trading it went good, as I picked up some nice gains from the sessions. Nothing earth shattering, but good enough. Just traded small, as I am marking time for better opportunities in the coming week. I am sure I will find at least one mega day this week. That is a day with 2 to 3 times or more a typical average daily gain. Having 3-4 of those type of days per month, can make up for a multitude of trading sins. A screen shot below of my trades today.
Being able to read price action is the key to successful day trading and or any kind of trading. I have said that many times before and is a valid point to be reminded. I like trading with trading indicators, but I don’t always lean on there every signal. I always balance my approach to what I know about support and resistance, as well as many other unknown trading techniques that I cannot discuss. I show these trading techniques in my video updates that I send to my students many times each week. It is so nice to see that so many of my students are understanding the trading concepts that I teach apart from any trading indicators at all and are able to apply them to the markets to get what they came for.
Recently, I have been expanding my trading concepts to include the ability to project where prices will likely go based off of many factors. One of those factors being the amount of stored energy in the trading instrument. That energy get reflected back onto the market in the expression of a long or short move, depending on the directional release of the energy. Many times you will see the market pull to the opposite end of the trading spectrum as that release gets played out. That is where and when you want to be able to position yourself in-front of that move. You then possess the trading advantage.
Depending on your trading time frame, a trader can do very well to hold onto large direction shifts in this energy. I am able to see these shifts in energy by understanding the price action trading that takes place on the trading screen. There is a reason why prices move as they do, it is not just random as some would say.
The recent expansion of this concept is what is giving me the ability to project future price action, with precision. I don’t always have to be right, but right enough to make it right. With good money management and having the ability to enter an S&P trade and risk no more than 4 or 5 ticks or a stock equity trade risking no more than .10 cents, gives you certain advantages over other traders.
Currently, my focus is still on short term trades, 1-3 points for many, with the occasional 5-10 point trade. Becoming a good day trader takes time and discipline and a good proven trading method. You need all of those, to make a living at this. If you are lacking the trading method and the discipline, I think I can help. The time, you will have to put in. Nothing worth while ever comes easy, but the rewards are outstanding.
Good Trading, Vince
Related posts:
- Price Action Rules When Trading the Markets
- Price Action Trading – Key to Long Term Success
- Price Action Trading Defined
- Price Action Trading & Trading Indicators
- Price Action Day Trading
Tags: price action trading, reading price action, Support and Resistance, Trading Techniques
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