Today is Wednesday January 11th 2012, where we just keep seeing low market volatility day after day. During the Christmas Holiday’s it was understandable, but now into the new year, the amount of trading opportunities has gone down.
Day trading in a low market volatility conditions, will test the skills of all traders, as the moves are smaller and trading opportunities fewer. In addition, your level of patients will be tested as well, which brings me to today’s trades.
I was tested a few times with being patient, but I don’t fault myself for playing it safe. I come to expect the market to react when conditions are right and when it takes to long, that can be a sign for caution ahead. Being conservative can keep your losses small, but if doubt is present, my view is to step aside until stronger conviction is present. The day’s trades below.
The trading method is separate from the trading indicators as they are there to confirm what is already present. That is very important and cannot be over-repeated.
Not every trading signal as shown is a low risk entry and would have passed on some of the previous signals. Using the mind and method to screen out which turning points are best and which are to left behind can keep your balance sheet healthy.
I have been on a little kick about this in my last few post, but it can be misunderstood as I just post the charts and such. I look to capture 2-4 S&P points for most sessions and call that my “Daily Goal”. When the market is really moving and opportunities are present for more, I will go far beyond that goal to help make up for any short falls in the previous days so I can keep pace with that average. It is a good way to approach the management side of your account as this will keep your stress levels down, not having to swing for the fences every day.
Which all reminds me of some trading advice I gave a member today. We don’t have to take every trade we see and we don’t even have to take “Any” trades. If we don’t like it or not sure, don’t feel like to you have to take it. We are not under any obligation to trade and so we should be free to pass. This will allow you to see the hidden gems when they come up. The perfect trades will just show up, without you having to hunt for them.
In market conditions as this, it is very important I feel to be able to “snip” or pick off a point or so on some clear trades. Doing so correctly can add up just the same as one good trade. If the bigger moves are not present, what you are left with is small moves. If you can not find a way to take points out of that kind of a market, then you are now at a disadvantage and subject to market conditions.
For some, this is no problem as I mentioned above, we don’t have to trade conditions that don’t meet our expectations, but I have seen market conditions last for months like this. If you can not make a profit because your conditions are not right, then you are out of business.
That is why being well rounded to be able to take a 1 point out of the market while not risking more than that, is of value. You can always trade the 3-5 point trades or more when they are present, but you are in greater control. Having the ability, even if you don’t need to use it often, will add a greater sense of confidence to any trader.
That is why I have different models setup for different conditions. The one I use mostly, is you could say the all purpose model. I have a higher time frame chart that fits in with the one I show (that is not seen) and they act as a team giving you a full picture as they are interlocked in my own unique way. There is one series of this below and one series of these above the middle one mentioned. All three of these can be used for insight and or trade opportunities to give you results based on market conditions
More on this in my next post….
Good Trading to All, Vince
Related posts:
- Low Volatility Keeps Traders Away
- Volatility Returns to the markets
- High volatility just means more opportunities
- Trading Volatility, Friend or Foe
- Scalp Trading & Market Timing
Tags: market conditions, market volatility, trading indicators, trading method
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