Today is Monday February 22nd and the markets pulled out another day of gains.

We saw a  6 point advance on the S&P, 44 points on the Dow and 22 points on the NASDAQ, pretty good. Overall the last four trading days have been contained and we have a consolidating market at this point. A period of rest is normal and expected after the previous advance of the last few weeks. There is room for the market to pull back inside of today’s low and Fridays high.  A breakout from Fridays highs of 1165 could send us higher yet again while at the same time we could easily trade inside of today range and possibly retest it? This part is unsure, but those are the major points of interest for long and short.

Traders will have opportunities which ever way the market moves, but we will have to read it. Just like reading the newspaper or even reading this blog. You were not born knowing how to read, but with practice and persistence you were able to do better and better and with time you could quickly pick up any piece of literature and just read it, to then see what it is saying. From that information, you are able to take action on your understanding of what you just read. That understanding can lead you to many rewards in the your field of interest.

The same is true with the trading markets, we need to be able to look at a chart and just read it as in the above example. By doing so, you are not dependent on indicators or any other outside influence. The markets have a rhythm to themselves and it is best to try and pick up on that trading rhythm and get in sync with it. Trade with the path of least of resistance and you will maximize your returns.

The trading markets advance and then they rest, advance and rest. This cycle is repeated over and over and is the basis for us to read the market. All of this is called “Reading the Price Action”. That is what I call it anyway. Other traders may call it something else, I don’t know, but this is how I see it and trade it. Let me give it to one more time, what exactly is price action.

“Price action day trading happens every day the markets are open. This is the study of price movement or price bars in any time frame and that alone, no indicators or anything else. Most traders use indicators to help them see what the charts are saying, but a pure play is in reading the chart alone in this manner.” That is my definition.

I believe traders are best served to learn how to read the market in this manner. I know I have said this before, but trading indicators only reflect what the price is saying. That is really important to understand and should be the basis for us to learn to trade in this way.

I can go pretty deep in this area and break down all of the points that make up the process in learning how to read the market this way, but that is reserved for my trading subscribers. I don’t often talk a lot about how I do what I do, but try and show what I can here and there for traders to see and understand that trading for a living can be mastered.

I talk a lot about trading psychology because that is an area that gets overlooked by many traders and many times is the determining factor for them becoming profitable.

Learning how to read a price chart and trade off of it successfully with nothing else on it, with a very low risk per trade is something that is not going to be picked up overnight. You will not read about it in books and you rarely see it used and talked about. It is the same if you tried to pick up a foreign language and master it in a couple of months. You may learn some of the words and phrases and get some of its structure down but it is going to take time. Are you willing to stay the course and learn this language? It takes focused energy and commitment, but you need to keep your life balanced at the same time.

The traders that want to achieve this skill are the ones you will not give up. The key is, do not put the things that are important to you at risk while pursuing your goals. We always need to maintain control when we are pursuing any dream. If not, the cost can become excessive and all we hope to achieve has gone in the wrong direction. Don’t let your passions blind you from maintaining balance and patience in your life. Again, if not, you only push off that dream farther into the distance.

Getting back on point, reading the market is where traders need to go. Price action is the study of price and its movement. Become an expert in this study of price movement and the emotions that are tied to it by the majority of those who trade it and you will always be moving in the right direction of your goals and dreams, because with that knowledge you can position yourself to take what you want from the markets almost at will. That is not meant to seem like a cocky statement but one of confidence and expectancy, all the while staying humble and balance.

Today’s trading I started later than I am used to, but picked up the low side of my daily goal on a little smaller size. The smaller size is because I started late. I will often do that if I trade late in the day because I do not have time left to come back if I have draw downs. My results below.

Trade On, and be safe !