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Emotions and Day Trading

Friday, September 10th, 2010

Today is Friday, September 10th, 2010 and we saw the Dow up 47 points and the S&P December Futures up +7.25 points.

We continue to slowly move higher as today was a very quiet trading day. We saw most futures traders in the financials switch to the next front month as I mentioned in my blog yesterday. Traders need to be aware of these days as it could end up costing them money. Mark your calenders and know when that day is coming so you won’t be surprised.

Today’s trading was pretty uneventful for me. I wasn’t even going to trade, but late in the session I did decide to engage. I had only a few trades and picked up a small sum. I did not pressure myself with hitting my daily goal, because of the slow low volume day. I missed all of the early session and started to watch things during the slow time of day. Later on, it did pick up, but only a touch. Anyway, I have a video of the whole session showing the turning points and the new contract month for the S&P, ESZ10.

Their is not a whole lot as far as direction and trend that I have not already said in recent days. I do see some competing area’s of leadership when compared to the Dow and the S&P. The S&P has cleared some overhead resistance that it needed to get over and it has done that the last two days, while the Dow has not. About 80 Dow points higher their is some invisible resistance to overcome, so we will see on Monday if we trade to that area and then take a breather.

It was good to see the market close near the highs of the session, a bonus for Mondays open. The closing days position has a lot to do with future direction as it relates to the daily and even the weekly charts. Depending on the previous price action, a close near the highs of the day, will tend to have bullish tones for the next session. Many traders take their Que from this type of closing position and will have orders pending the open of the next session. That leads to buying and often times, buying begets more buying, (short covering and regular interest).

Going forward, I do believe the bias will be to the upside. I really should not get to caught up into figuring out every twist and turn in the daily and weekly charts. I do that because I know many people follow it and it does give me something to write about. It is very interesting to do so, but as day traders, we are really most concerned with the turns inside each day. Every day is a fresh start with no baggage before it. We need to leave yesterdays gains and or losses behind us and focus on what is in front of us. If any trader gets to preoccupied with past history, whether it is good or bad, it can be harmful to your current fresh start day.

Traders need not get giddy with large gains or depressed with losses. If you do, you will be working against yourself. Everyone is different and your excess emotions will get played out negatively against you. How do we guard ourselves against this emotion?  Decide now that you are a professional and then act in accord with what you feel this image best represents yourself.  Controlling trading emotions should be at the top of the list.

Next, I could think of bragging about one’s new title as “Day Trader”. It is an admired profession, but most people know that this is a very hard thing to master. By releasing the controllable emotion of excitement and hope for your new future to others, you work against yourself in ever realizing those dreams. The energy that gets released in the form of loosely sharing with others, takes power and energy away from you. One of the reasons and their are many, is, you create an image for yourself that may be hard to live up to. If things take longer or don’t work out the way you plan, you may find yourself  fibbing about your progress to keep up the image you created by loosely sharing and that creates a whole new set of problems.  In addition, the emotional high of sharing and releasing this emotion is in itself a form of gratification, which then reduces your resolve to make it all a reality.  It is sad to say, but that is the truth. This makes it ever so much more difficult to reaching those sought after goals. So decide now that you will keep your new venture close to the vest.

Emotion come in many forms. The ones I mentioned above are not easily identified by ourselves when we do it. It sometimes takes an outsider to point it out to us, because as mentioned, its not easy to see.

We are much more akin to hearing about the emotions of  “Fear & Greed”.  One can never over state those two. They make traders do things that they never thought they could do in a rational world, but once those two emotions latch on to you, watch out. If you can identify it ahead of time and that is what I am trying to do here today, we should just stop trading. That may be even if you are up on the day and especially down for the day. Usually, our trading only gets worst when you let these emotions out of the bag. Rather than go into it now, I need more time to better address those two. I have wrote about it before, but many months ago I am sure. My perspective has likely changed a little as I have a lot more input to add against the topic.

To recap, all successful traders need to see themselves as they want to be. “A professional Day Trader who earns his living or supplements is living from the financial markets”.  Maybe it would be a good idea to write down a few things that you need to change so that you can mold yourself into that description. It is different for everyone, but if we take this one step forward towards that end, we will be making progress and isn’t that what it is all about. We are all on this journey together, so you are not alone. I have many things I need to change to better meet that description myself. Even if financial goals are met, often, their are other area’s of self improvement that we know we should be addressing and that is progress one day at a time.

Good Trading to all and have a great weekend, Vince

P.S.  Do something fun before the weather changes !

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The Stock Market and Time Element

Wednesday, July 28th, 2010

Today is Wednesday, July 28th and the market is pulling back a little after yesterday’s gap opening higher.

We hit some resistance yesterday, as the market pushed up yet another day in face of bad news, but today, it looked clear that a pull back was in order. After early weakness, the market did present itself for new short opportunities, of which I did not have the time to trade. I got stuck in the dreaded dead zone, mid day. The market performs so much better in the AM and afternoon trading sessions, but I am partial to the AM.  I don’t often trade it, as I wish sometimes I lived on the East Coast. That would make it a lot easier. I should not complain, so I will just clam up about it. All I can say is, I am working on it.

The after market trading in the S&P, is showing some strength, with the current price at 1104. I see short-term resistance coming in at 1105.50 and will likely trade back down, for at least a moment. If  this market can get over the 1106 futures number, we could see 1110 pretty quickly. This is just the next couple of likely moves in the morning session. If 1106 is broken, we should trade up to 1110 or so.

The market is going to need an element of time. Time is very important in the trading equation. The stock market moves through time and space. It has a natural rhythm to it and natural trading target area’s that it will gravitate to. The element of time is something that is often forgotten. Without time, the market would not move. I know that sounds like an obvious statement, but traders often want what they want and they want it now.

The market will not give you what you want on cue. You have to be in tune with it and trade on its time. After a big market move, many times you will see the market go into a slow consolidation, of short swings up and down. With no real direction, it is in effect moving sideways trying to digest the big move it just made.

When you have a large meal at home or at a restaurant, you need to pause, take a break and then maybe have desert. The desert can be the last wave up in an ongoing move, but after that, it is time to relax and digest the meal. Every chart has a left and right side of the chart. The left side is called the acceleration phase, the right side is called the deceleration phase. There is a top in the middle that separates the two phases and that is an expression of time as the market goes back and forth, up and down, as the struggle for control takes place. This happens everyday, a balance of power is waged. We should not consider ourselves smarter than the market and we should not argue about its directions because the market is always right. We are the ones who at times don’t get it right. So what are we going to do about, ( I ), get on the right side of the market and go with it and not against it. That too, seems like an easy answer to a not so easy task, but every trader needs to find the rhythm of the market and trade with it.

I put up a couple of indicators on my screen shots to show my readers how the price drives the market to these natural turning points that we see everyday. Day trading or any kind of trading, is about getting into sync with the natural rhythm of the market in that specified time frame.  This is expressed in many time frames across the board. The market is amazing and I don’t know of anything else like it. I have talked before on how the stock market is “Fractal” in nature. That means that it expresses itself in exactly the same way, but across a multitude of time frames. That is why I have put up different time frame charts a few weeks ago of the Dow Jones and the S&P in 30 minute bar charts.(U-Tube Video Gallery)  This is just an expression of what is happening in that related time field as the synergistic effect is still always present. You will see the same expressions of timing and natural rhythm expressed across a multitude of time frames and that is just amazing to me. In the beginners section of my website, I have a few pictures of this symmetry as examples, that are found in nature. If you care to take a peek, just go to the heading “Beginners” and scroll down to see a few pictures of this. I am easily impressed, and I think this is just amazing, but that is me.

In my first trade today, I took profits to early and on my second trade or so, I should have closed out my second half before I gave it back for -1 tick. I did OK and came out on top, but came up short of my daily goal and was getting tired so I stopped. I new the market was going to get going in the afternoon session, but I burnt myself out already looking for movement where there was little.

Yesterday, I had only two trades, and hit it nicely, roughtly 2,3,4 points on one trade and just a small scalp for about a point on the next.   Both days of trading are below.

That’s it for now, we will see if the market marks time by going sideways or pulls back, both will accomplish the pause we need for further advances.

Good Trading,

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Looking for Reversal Monday or Tuesday latest

Sunday, July 11th, 2010

This post is for Friday’s session July 9th and we did see a continuation in the uptrend very close to 1080 as called.

The cash S&P hit 1078 with the futures just behind it in Fridays session. After the close, the futures dropped, several points coming off its closing high, with that sell off continuing in the night trading Sunday night. On Friday, I was looking for a possible reversal coming off of 1080, but we never got there. It is possible that on Mondays session we might see that reversal. I will have my eye on that if we make at least one push up on the open which gets close to that 1080 number, + or – a couple of points.  There is a little more room to move past that number, but I do see resistance coming in from a few directions and confirming with other markets.

We will have two trading sessions to make an impression on the bears before the Investment sentiment survey is again taken. Those numbers dropped 4% last week bringing us closer to a bullish signal. Currently at 37% with 35% needed to push things up a bit more than just a minor swing of a few days. These buy signals can last for several weeks. So, if such was going to happen, we would need to come back off these highs and make an impression on the bears that this latest bull move was just a fake and the real move is yet to begin.

If that is the case, it would coincide with the natural rhythm of this market and we could get a late 4th of July bang. That is not the popular belief out there and I say that with a little hesitancy, because everything looks awful out there. But earning season is just about to begin and we could see surprises, enough to move this market.

I again will say, that I am a big big long term Bear and think this market is going to tank, but just a fake like this would be a perfect recipe for taking out all of the shorts first. Make them suffer first, put the squeeze on them, shake them out, or how ever you would like to say it, but don’t make it easy for the shorts. If in-fact this market does this, it could set up a very nice move later in the year for another crash.

That is a mouthful, and should not get ahead of myself. One thing is for sure, if you know how to ride this market, you can clean up once the moves come back. Overall, the market has been acting pretty good, with moves in both direction and with size, except for Friday.

Friday was a very soft day of movement, especially the mid day. There was very little movement from 9 to 11 am West Coast on Friday. If you tried to trade that, you likely did not do well. I to often trade when I feel like trading and it cost me on Friday. I got myself caught in that trap and did see my first daily stop out in a long, long time. I did have my chances, but if I hit – 4 S&P points in any one single day, I am done and such was the case. I still did very good for the week with Thursday more than covering my losses on Friday as it was over 3 times my daily goal.

I will shoot for 2-4 points per session, with a bias for 4 points.  My daily stop out point per session is -4 S&P points. A minimum 2-4 times per month, when the conditions are right, the market will just give you extra points. Those are the days that you have to make extra. You don’t actively seek it, the market will tell you when those days are and when it talks you listen. If you make extra points 2-4 times per month, if you have a day that you get stopped out, it is no big deal. You just get back on the horse and ride. It is best not to go looking for the big score every day. If you do that, you will be forcing the trades, not a good idea.

Trading is supposed to without * Effort , without * Force, without * Straining, without * Struggling and without * Trying. It should be effortless. Hard work is in the training and preparation, but while trading it should be without any of the above, but should be natural.

Compare a world class runner vs someone who rarely runs. To the one a 5 mile run is easy, while a one mile run to another is a great struggle.

Think about it. If you struggle and need and or want help, email me. To ask questions and get answers. You don’t have to be a member of Sniper Day Trading, I do want to help traders see “The Light”, so to speak, but if you need formal training, I have that very much available as well. Just a reminder, we teach all our students to read and understand “Price Action” with the trade indicators being extra.

Good Luck and Good Trading to All.

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The Closing Price of the Day

Monday, April 12th, 2010

Today is April 12th and the market went to sleep today, literally.

What a slow boring day on wall street as far as the major index’s are concerned. From the opening bell the market traded roughly 2 points higher and 2 points lower until the last few minutes of the day and ended up closing at the low for the day. That is not usually a good sign. The position of the close is very important each day, with the last few minutes of the day key. The reason is, it shows what the current true value is for the index at that given moment and it is the end of the day that sets up so many trade positions for the next day. If the market would not have sold off just those few points at the end of the day, it would have changed literally hundreds, even thousands of trade positions for the first 30 minutes of tomorrows open.

The close shows the end result of the whole days struggle, long and short. Who won? I would call it a draw, with a slight edge to the bulls today. The S&P futures were flat, no gain, or loss. The cash dow was up 8 points and the Nasdaq was up 3 points. That may not say a lot for some, but seeing the last move of the day was coming off and we closed at the low as I mentioned, it will have an impact on the open and it could be to the downside at least for the open, we will see. The after market is currently off as I speak about 3 points as it is anticipating tomorrows lower opening just as I was mentioning. A lot can happen between now and tomorrows open, but the pressure is to the short side currently.

I did some trading today, took 7 trades and with the last couple was able to pull out into positive territory, picking up more than my daily goal. I did take a position into the after market as the momentum was to the downside and seeing I was a little short for even a single daily goal, I elected to hold it over. It worked out for me but I don’t like to do that. There is the 15 minutes after the close at 1:15 West Coast to 1:30 where you are unprotected if you elect to hold an position over. If you have a stop in place and go into the close after 1:15, your stop will be dropped and you are exposed for that 15 minutes until the market re-opens. Usually nothing earth shattering happens, but at times you will see gap re-openings working in your favor and possibly against you. Today’s re-opening was uneventful at first, giving me a chance to reset my stops and see if the momentum continues, it did.

I see some key area’s I have marked on a chart from the link below. Selling will start coming in with a greater velocity at around 1176 and it should really pick up at a break of 1171. This market has been all one way for some time now, and I would like to see it continue, but if we hover above those numbers and break them, I am pretty sure the selling is going to pick up for at least a spell. We may see a reaction rally back up if it in-fact it breaks down, but be careful here. The market does have some room to breath, but it is on thin ice. Current price -4 points at 1188 from the close of 1192. So, again, the market does have a little room here, but it will need to prove itself once again, very soon. Trade safe.

(Daily Chart S&P futures, Dow ,  Nasdaq)

www.screencast.com/t/Y2ZlOWNkOTQt         (Today’s Equity Chart)

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Stock Market Still Showing Signs of Life

Tuesday, November 17th, 2009

Today is Tuesday, November 17th and the rally stays alive on Wall Street.

The Dow was up 30 points and closed at the high-end of its range for the day, a good sign for tomorrow. The close of each day is really very important when you look at the big picture and are reading price action. A couple of weeks ago, I showed a video of daily data and how the close on some of those days gave a clue about a pending market reversal.

Well, it is nice to see it close at the high-end of the range. It is no guarantee but it sends a message to the “Steet” that the buyers at the end of today, have confidence that tomorrows open will be higher and they want to position themselves to take advantage of what they think is the next market move.

The Nasdaq was up about 6 points and the S&P 1 or 2 points. So the rally is across the board. I did just check the adv/dec line for today, and it looks like the declines did outpace the advances by around 300 issues. That is not usually a good sign, but don’t draw your complete conclusion on that. Those that are looking for an excuse to sell short this rally will definitely be looking at that and saying, “see, see that……” and so on. The price tells all.

If the news is good the rest of the week, the buyers may not be able to help themselves and may start shopping, lets hope so. Keeping the rally alive, is good for  everyone, God knows our country has problems and traders know too. If we can get over the hump as I have talked about the last couple of days, it could set the stage for an extension to the good times.

November is typically a very good month for the market, December too. The traders and investors need a break this year, I can only imagine if we don’t crack and break the current momentum, all of the heated debates about the economy and politic’s over the Thanksgiving Holiday. WoW. It will sure give everyone something to talk about.

I am going to try and start posting earlier than I have. I went back and read yesterdays posting and I saw 4 type o’s. Not cool. I have been posting late and I am sure I was pretty tired, so, lets see if I can follow through?

Yesterday, I briefly talked about always having your stop in at the time of order entry. Let me go over that a little more.

When you place an order, there is no way any trader is going to expect his account to survive if he does not know at what point he is going to get out. That is plan and simple. If there are readers of my blog, that do that, let me kindly and gently encourage you to always place a stop at the very millisecond your order goes off. Most trading software will have a feature like that. If you place and order and then go and click on your stop price, maybe as you have always done, eventually, and it may not come for a while still, but anyone who has been trading for any length of time, will tell you, that you are going to get burned.

It only takes one time, to mess you up. You may have forgotten or not even aware of a Federal Reserve interest rate cut or increase and just at the moment you place your order, long or short, the market moves away from you so fast and far, you freeze as you see that you are down 10 points in seconds. The next few moments are critical, you need only do one thing, hit the close button and go flat immediately. If you rationalize the move and say, it will come back, maybe it will and maybe it won’t. How are you going to feel when you see yourself down 20 points and you only had intention of risking 6 ticks on the trade.

It could happen and I only tell you because I was one of those guys that it did happen to. This happened a long time ago but I never forgot it. I was shocked to see my position move like it had wings, in a blink of an eye, I was down 10 points. I rationalized it and waited and was down another 5 points, waited and now hoped and down another 3 points, inside of just minutes the position was down 20 points and I could not take it any more and closed it out.

I learned a valuable lesson that day, NEVER TRADE WITHOUT A STOP IN PLACE, IMMEDIATELY ON ORDER ENTRY.

The day that this happened, it never came back and in fact dropped another 15 points to close at the low for the day. When you find yourself wishing, hoping, praying, you know you are in trouble and doing those things are not going to help you. So, for those who say, they don’t like putting a stop on right away, they don’t want to get stopped out by giving away their position.

That is not a good reason, in fact I don’t know of any good reason for not having a stop order in place at the time of order entry. Getting wiped out, is what the novice does, not having a stop in place is what the gun slinger type trader does, neither will be expected to last very long. In fact  “Wall Street” feeds on these people like those little small orange fish you see at the pet stores, in fact they call them “Feeders”.  Don’t be a feeder, become a feedee….

I just made up a new word, I don’t think it will be in Websters anytime soon, but do you see my point. You need to do the right things as a matter of habit and not as a feeling.  So that’s it for now.

Last thing:  My website updates should be done this week. Those new people who may be following me, look for the updated pricing. It is much more affordable for those wanting to get started.

Good Trading to All !

http://www.screencast.com/t/ZTY1NTY4N2Qt     Today’s equity curve

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Market stalls, in a wait and see mode

Wednesday, May 6th, 2009

Today is Tuesday, May 5th and the market seems to be marking a little time.

The market backed off slightly from yesterday’s new highs, which can be expected. It is going to be interesting to see if we have another attempt for new highs before we see a continued pull back. My thoughts are we will see a pull back.

I noticed a late rally near the close of today as I am looking back at it and it appears to have made a nice pivot point for a break to the downside if in-fact that gets broken. The trend is still up, so we really have to wait and see, but again, I will be watching for a break tomorrow. I can have an opinion, but it  should be held loosely, because the market can do what ever it wants, when ever it wants.

Today’s trading went OK. I have been trading the early market open and it is a little faster pass. I missed a few trades because they got away from me, but that happens at times. I have been a little extra cautious the last few days, possibly because I do not usually trade the open, but it may just take a little adjustment.

I started out in positive territory with a couple of losses here and there, but my equity graph had an upward bias through out my session. I saw a few nice setups and picked up some larger returns short. Over all I took about 19 trades and picked up 4 times daily goal at $2,000. I have been trading 5 contracts or less so my daily goal is back down to $ 500 plus. That’s OK.

I have some unexpected company for the next couple of days so I am going to cut my blog post a little short today. We will see you all tomorrow.

http://www.screencast.com/t/19ARC3TCN8 Today’s equity chart

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No trading today!

Friday, February 27th, 2009

Friday, Feb 27th and my platform is down.

There is a problem with tradestation today. I am not sure what it is but I cannot log on to the platform, everything is frozen. They said it should be back up soon, but it’s been awhile already.

I will be out of town for a couple of days and will try and post again on Sunday afternoon. So until then, have a great week end.

Vince

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Light volume around the Holidays

Tuesday, December 2nd, 2008

Hello, just a quick post about the Holiday volume. We had a nice rally during the Holiday week. Usually that is the case during the Holiday period. November and December are usually very good months for the market.

My last post stated that if we broke the support of the week before last, that we could get another significant drop of 1 to 2 thousand points. Well, the next day after that post, we broke that support and dropped 1,000 points exactly and then we started the retracement. We are coming off a 5 day market rally as of today. A retracement again is under way. I am expecting this big decline today of almost 9% to hold. Another drop of about 15 S&P 500 points and 150 Dow Jones points to the downside tomorrow morning and then we need to see support come back into the market. if we can hold this area, we will have a very good chance to mount another meaningful rally of over 1,000 point plus on the Dow and 100+ S&P 500 points.

As I first started out mentioning, the light volume around the Holidays is typical market behavior. The big players usually take off during this time of year and it would appear that this year is no different. The market tends to be very jumpy during this period, because there is no real large volume behind it. The big boys are gone and the retail players are left pushing up and down without conviction. The trend is hard to get established and jumps up 2 points, down 2 points all in one breath. Its a little hard to trade without getting stopped out, especially if you are using only 1 point stops.

Bigger volume should be coming back sometime later this week. It’s not that the market does not move, it’s just that it is easier to manipulate and get pushed around and it’s easier to move because you don’t have the resistance from big players moving against you.

Well, let’s hope this market stabalizes for now. I would expect the market to hold up until the end of the year. Sometime eary next year, I am afraid we are going to go down again for another big lasting drop. The worst is not over, unfortunately. But remember we are not predicters, but interpreters. We read the current market action and we react accordingly. The market is always right.

I will start trading again in 1 or 2 days when the institutional players return and volume comes back into the market. Below is a chart of the S&P and the Dow, to show you where we are. I would like to see the downtrend line on the outside get broken to the upside. This will be the first indication that we will have some time on our hands and the market will start to put in a bottom. This is only going to buy us some time and will not be the final turning point, but that is just my opinion. There again is a good chance this will take us into 09 if we can overcome that resistance. But let’s start with tomorrow and shake out the week hads early in the day, only to close flat or higher on the day. That will be the first task at hand.

http://www.screencast.com/t/GzLjaJ2W

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Very light volume ahead of Presidential election

Tuesday, November 4th, 2008

Today, I saw very light volume and a market that did not know where to go or what to do. It was basically in a holding pattern until the market knows who is going to be elected. But let me tell you one thing, when we find the winner, boy oh boy. This market is going to go right back to his old tricks of BIG swings. It happens every election and I remember all of the past one’s. 

When George Bush was elected the night trading was incredible. The market was establishing itself for new policy in so many areas. The environment, oil, exports, on and on. Every category saw shifts taking place and I would imagine that this time will be no different. With an Obama win, you can expect a big surge in alternative energy stocks. Solar power is going to experience a big surge in volume as people pile in. Every one has their buy lists ready to go and with a push of the button the reallocation is going to take place. In addition, those expecting an Obama win have placed their positions already, but that could be premature. Who knows? But we will see shortly. Expect big moves and it could be to upside. My job at Sniperdaytrading is not to predict, but to interpret and there is a difference. Once something happens, and as it is happening, we position ourselves to take advantage of the movement and thus the profit.

Below is a small sample of some trading chart setups that I look for. This is a very small sample but when I see these setups I move on them to capture my piece of the pie.  After that, is a small section of trades that I took today. I have notes next to the trades showing if it was a winning trade or loss. This small section of time is only 20 minutes, but a lot can happen in such a short time. Take a look for yourself.

Enjoy,

Vince

http://www.screencast.com/t/uR0XutHp2

http://www.screencast.com/t/jxZCIipcC4D

http://www.screencast.com/t/ByMOh7Ars

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Keeping it simple, in a difficult environment

Monday, November 3rd, 2008

As I stated in my last post, you will see the same patterns every day, up and down. I am capturing small winning trades every day with positive results. You need to be able to open your mind up to the possibilities of taking trades in the down direction as well as the upside. We do not care in what direction the market moves, but only that is does.

It sure is doing that these days with some very large moves. Sometimes I catch these and other times its just a smaller move. The best part about my method is that there are many places and times to be able to get in. There are a lot of great signals in the early morning open. The first 30 minutes of the day is some of the best trading although it’s really good for most of the day, but it can be a little slow during the New York lunch time, 11 am to 1 pm eastern standard time (9 am to 11 am west coast time).

Look again at a few early morning trades I have posted under this article. Also, I have some nice screen shots of a classic trading chart pattern setup that I look for. There are many great trading chart patterns to look for and some of these will include “Flags, Pennants, Wedges, Triangles, Channels, Head & Shoulders” and more. You can learn to trade all of these with no indicators, but with just trendlines, as in the examples I have below. Learning to trade without indicators is really a great skill and I highly recomend people interested in trading take the time to explore it. I have all of this broken down in the training section of my website. For the time being, I will be posting some of this training on my blog. This is not meant to be a complete explanation, but just a small sample to give you an idea of what you can learn.

When trading futures as I do, you don’t have to trade all day because of the leverage involved. The idea is finding patterns that happen over and over and being able to capture a small piece of that move. The key is finding patterns that consistently repeat themselves so you can take advantage of them by positioning yourself in the right spot where small mini panics take place. I have said that before but it is key in understanding how the market works.

A basic way to think of this is, “Support & Resistance”.  Resistance is where there is a barrier where prices seem not able to advance. This is because there are no more buyers at that price and selling pressure ensues to take prices down brought on by profit taking. My method is such that we can easily spot where those turning points are. One of my custom indicators is set up so that a simple change in color more easily shows you that a shift in momentum is taking place. This is just a tool to help you see what is already present in price action. Just remember that “Price always rules”.

Tommorrow I will discuss Support and take it from there.

Vince

http://www.screencast.com/t/F3AdFKR1sE

http://www.screencast.com/t/HjUf8PKeEdI

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