Today is Wednesday, September 8th, 2010 and we are looking at some very exciting possibilities coming in the days to come.

I have been looking for a break out of the 1100 S&P recent highs and we may be close. With the resistance coming in on Friday’s market close, a sell off of some magnitude was reasonable as we saw in yesterdays trading. Today, we came up to attempt a challenge of the highs, but it wasn’t ready. Time is an essential ingredient to trading and can even be considered and indicator and or (indication) of future movement, as we are in right now.

A pull back to the middle of the range is a  possibility as I mentioned last week and would bring in more selling to maybe as low as the 1070 S&P area, but two area’s would have to break down first and they are S&P futures 1092 and then 1086. As long as we stay above those levels we could be getting into position for higher prices.  A market move above today’s highs would be considered very bullish and follow through to the upside likely.   A move could come in the night trading and or in the early premarket, so trade accordingly, long or short.

So to recap, I am aware of both sides of the market as defined by the levels I mentioned above. I do have a upside bias, but the market will tell us all which way it wants to go. The price is always the best indication on what to do and when to do it. I put my opinion out their towards overall direction in a much larger time frame, the daily, but as day traders, “Price Rules”.

In today’s trading, I did not have a long time to trade only a few minutes as I was traveling to the San Francisco Bay Area. A coffee break at Starbucks was good for a small scalp trade and later on down the road, good for another couple of small scalp trades for about 3 points in total. Only traded small, but I waited for good high probable entries and took what was their. All in all, I was only following and trading the market for about 30 minutes, unlike yesterday where it was a few hours, way to long.

Yesterdays trading was a little harder (10 trades with scales) in the beginning, as I again started in the slow time of the day.  In addition to the market going nowhere, made for a difficult start. I did put it together as the last part of yesterdays market showed much better price action. That translated to movement and opportunity. I have an equity chart for yesterday and price chart for today below.

In contrast to yesterdays action, today’s was no comparison. Today had so many great opportunities to it as the market started out strong giving traders several chances to enter long as the move continued. Then the big swings started and it only got better from there.

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Trading is all about exercising good timing on your entries and exits. If you know where to get in and then get out, with reasonable targets, you could do well. If your timing is off, you will struggle and take larger stops and take them more often, before you realize that you are underwater for the day. Being behind and trying to play catch up, has its own set of problems as you are trading from a position of weakness. Getting behind is not unusual, but being able to wait for the moves that will bring you back and take you higher needs to come one trade at a time. If you focus on what you are supposed to do and not the money, the trades will produce the money. Our minds have a way of helping or hurting the cause. The results will depend on your thinking and your focus. If you know what you are supposed to do and look for, then the power rests in your ability to focus, exercise patients, and have sniper like execution on your entries. If you don’t know what you are supposed to do or look for, then that is a whole different situation.

Trading indicators are not the end all be all in the trading world. They are only a reflection of the price. I have said this many times before, but repeating that is quiet alright. Traders need to see ahead of time the price building into something he is familiar with and that will take screen time. The trading indicators confirm what you thought was going to happen anyway, or that is how it should be. Many traders rely to heavily on what ever indicators they follow without understanding why it was saying long or short.

The answer to all of this, learn how to trade independent of any indicators and when you use them in the future, you will know WHY the direction is pointing up or down based on the price. If you can’t quite make it that far, at least you need to know what good price structure is and how it is built. That way, you will not loose valuable time as you build upon your trading career.

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Good Trading to all, Vince.