Still on vacation till after labor day, but will post a larger chart of the days turns. At the bottom of the post, I will put up yesterdays market turns, again, this is a larger trade structure than I trade, but it can be traded by those members who choose to.

Another spot on market call;  Last Monday, 8-22-11, in my blog posting, I called for the market to hold in the current area, and rally. At the time, the close was S&P 1123. A confirmation to the first target will be triggered when 1140 is broken and it hit that next morning. I said that we would soon see 1220 on the S&P with that rally and today, towards the end of the day, we hit the target 1220.10.  Then we saw an immediate price rejection of the target and prices reversed immediately in the last few minutes of the day.

Calling the daily market is no different than calling the hourly, 5 minute, or any size tick or range chart. It is all the same as the stock market is fractal in nature in relationship to different sized charts. The moves are proportionate to your risk at each level. In addition, less trades are generated when you increase your time frame.

I don’t trade the larger time frames, but I always look at them even if I am just scalping for points. It is a lot less work as you increase you time horizon as well.  Many traders search for what is there dominant time frame, short term, intermediate, long term. Each of these are and can be different for every trader, but I feel you should trade in line with your dominant trading personalilty.

As you do, you will not be fighting the process with either over-trading or under-trading, as that will be apart of your trading strategy. You only have to stick to your plan and excel in what you do.

When trading, you have to create a frame work to work from. Market structure is built and price is and can be projected through three elements, time, space and energy.

I have written about this before, but it might be worth repeating. It all boils down to understanding and building that frame work or market structure. The three elements mentioned above are all apart of that frame work and that is what gives you the edge.

The elements when understood, in conjunction with each other, can show you exactly where price will go in many instances and a likely time for its arrival as well. This can be done with small tick charts while targeting 2 points on the S&P and or a higher time frame view for 10 points or more. You will always have to invest more time for the larger moves and your exposure is increased, for the shear fact that you are in the market, but that may be a traders style, to trade less and shoot for that higher profit/loss ratio.

I have trained myself to trade for short targets usually in the 1-5 point target range and that will depend on market volitility. I always trade at a minimum of a one to one trade ratio and have a daily stop out point so that I will never get a blow out day where losses are off the charts.  I like to get a daily target that is close to what my daily stop out point will be for any one trading session.

This is like having a 1 to 1 profit/loss ratio as it relates to the trading session. Having a loosing day of 3-4 S&P points will be overcome by just one normal regular session of gains that is equal to that. So, if you take a loss for the session, the next session puts you right back at where you were before the loss and you don’t look back.

I do look for on occasion those days where price action is telling me to take the easy and obvious trades for much bigger gains and point values. There, on those days, I can come away with 3 times an average daily goal, but I never really go looking for those days. They just come to me and I go with it.

It is a good idea to not trade for more than two hours at one time. Traders don’t really realize this, but there brain will begin to slow down, and the high level of concentration necessary to capitalize will get lost. There, is where traders get into trouble. Trying to come back when they are not at peak concentration levels. Mix in a little emotion and you have a receipit for disaster.

This is the area, traders fail to hold it together. Many don’t really understand why they put on the trades that they do, as when in this distructive mode, only until after the dust settles and they look on in horror.

How do you stop that from happening in the first place? That is a question I would bet thousands of traders would like to know the answer for. I will only give you a very basic answer to this at first and may continue it in my next post, but much of that behavior and losses, could be eliminated by only trading for smaller blocks of time.

If you are a position trader still within the course of the day, then you need to wait hours at times, for your one or two trades a day. There is not a lot you can do, since your trading opportunities don’t come often, but in the case of much smaller time traders, you need to zero in all your energy into a small block of time and get your points there. When you stay to long, out of greed, or any other reason, you are often times asking for it.

Traders will never understand every twist and turn of the market, but we need to weed out that which we do understand and capitalize on that and just leave the rest. Always trade the easy and obvious is a motto I say all the time, that will serve us all well as we trade our way through the markets.

Good Trading to all, Vince.            Monday’s larger picture view below!