Market turning points are those area’s on the screen at which you see a distinct change in market direction. Those trading area’s at a minimum can be considered area’s of interest where a trade decision can be made, long or short.
If a trader were to use a scalping method, that could get him in and out quickly, profit can be made. You would first need the ability to spot the market turning points and those area’s of interest, to see if it lines up with your established scalping method. If it does, moving in to scalp a few ticks to a few points is the objective.
The markets are always pushing and pulling in one direction or another. Being able to enter with the lowest potential risk against you, draw down, is essential. Sniper Day Trading has established such a scalping method that does just that.
Their are many across the globe who aspire to be a successful scalp trader but have found their share of difficulties along the way. Being successful in this business is about knowing, that is, knowing when to enter the market and when to wait, you could say trade timing.
This takes us back to, “Market Turning Points” and how they can keep the scalp trader on the right side of the market. That is first and foremost a big problem for many, as their trade timing is just off, due to a lack of knowing which way the dominant trend of the market is in.
If you know which way the dominant trend of the market is in, you then work on your trade timing to zero in on your low risk entries. Many traders constantly struggle with all of this, as they find themselves second guessing their trade decisions.
Having a solid method to draw on is key, as it will give you all the things mentioned above. Becoming a successful scalp trader can be achieved but it does take hard work and dedication. Identifying the dominant trend will give you market direction and your low risk entries with excellent trade timing. That sums it all up right there.
It all starts with knowing. If you know, you will be empowered to act. A lack of knowledge will keep you in the dark, wondering if you will ever get it right. It could take you many years to get this knowledge (if ever) if you were to find it on your own or you could speed it up, seeking out the information and thus becoming in “the know”.
The choice is always ours, just like the trade decisions we make during the session. We need to live with them and hopefully learn from our past so we can adjust ourselves for the future.
I wish all my readers the very best, Good Trading to all. Friday’s scalp trades taken below, click on image to enlarge it.
In Monday’s opening, we saw the market continue to move up after Friday’s late afternoon slumber. The market call was completed exactly. I said the Dow was likely to move up about 90 points to catch up with the S&P as it was under-performing in Friday’s session and the S&P since already outperforming would likely move up about 9 S&P points.
Well, that is exactly how it worked out to the tie. Within the first 90 minutes we saw those numbers and they were re-visited later on in the session.
In today’s trading, I gave myself a grade of (B-). I did do pretty good overall, as I took 7 trades and had only 1 lose. The problem was not in the lose, but first the entry short. I did not like the trade, but I took it anyway and tried to get out with less than my original stop and it got away from me. That is not good. I know it happens a lot with traders, but I just don’t like it when I do it. I was doing a training video just before that and I even was saying there that I did not like the trade. O,Well.
I did come back nicely hitting some good trades short. I put a few notes on the screen shot below and my trades for the session are there to see. My timing was good overall and I won’t really complain to much.
I expect the trades I enter to move in my favor right away. If they don’t I am not one to wait around to long. There is a method reason for the exact entries and it has nothing to do with the trading indicators. The trading indicators only reflect what is already at work within the method, but all for different reasons. The indicators are a nice confirmation and they can give some insight, but I believe you need to know why you will enter a trade before you do and it should not be based solely on trading indicators.
Having a solid reason for the trade is essential. If not, you will only be following indicators without the knowledge or the price action behind it.
Good trade timing is also essential as you take little heat with positive movement behind you. Traders are not born knowing this stuff, it is either learned through many years of hard work or that time frame can be cut down if someone is there to teach you what works for them and others.
I will cut my post short tonight, but will try and continue with where I left off from my last post on the mental side of trading. There, we all can always better learn about ourselves and thus improve our trading. Until next time, Good Trading to all.
The market was off slightly today, but with a little better volume. The trade volume has been very week and with it the price movement. I know their are a lot of traders having a hard time making money in this kind of market and many of them are going to scalp trading to fill the void.
Many traders find themselves in a position for hours with no progress being made. It is hard to come back once you are down from earlier losses if you can not pin-point low risk entries. That is what scalp trading attempts to do. Traders are in and out before the move or market has a chance to evaporate their gains.
With the leverage that futures trading offers, a scalp trader does not have to hit an overly high point value for the day to come out nicely. A few S&P points will do the trick. The key is do it often and consistent enough to go to the bank with.
The human element of trading is something every trader needs to be able to work through. You might have an excellent trade method or system, but letting your emotions get the best of you can be a big problem. That is why trading for small blocks of time is best vs trading the whole day. It is hard to keep a high level of concentration up for the whole day, as most traders will find themselves hurting, not helping there account. Looking for trades that are not there, just for the sake of trading is a big one.
Good trades are made up of good trade positioning. Enter to early, and you could find yourself stopped out. Enter to late and the same thing happens, but entering when the market is at its lowest risk and highest reward point can quickly bring you home. Do it a few times and you can be done for the day. That is what “good trade positioning” can do for you. Put it another way, “trade timing”.
Good trade timing and positioning is the key to good scalp trades. Positioning has to do with time, as time passes the price gets into its natural trade position to move up or down, depending on “time and positioning”.
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Above is my trades for the day of which I was happy about, because my trade timing and positioning were in sync with one another. I don’t like to compensate for bad entries, doing so only tells me my timing is off and I am not in sync with the market and its rhythm. I can not trade the market on my terms, but its terms.
I will be looking for more of the same tomorrow and if I can catch a trend, hope to squeeze out a bit more on at least part of it. Until then, Good Trading to all !
Today’s market was up again with the Dow +71 points and the S&P +6 . What a resilient long lasting uptrend we are seeing since Thanksgiving. This market has gone up more than I thought it would given all the bad news, but it goes to show you, when you throw money at something what can happen. Is this smart money or some other kind? That is the question on everyone’s minds these days.
The bullish market sentiment dropped last week by a few percent which is a little odd with such a strong market. Tomorrow, after the close, the new weekly poll will be taken by the professional newsletter writers and there stand on the current market conditions are noted. This gets sent out to their subscribers all over the world and I am sure people act on a lot of their recommendations. Those market opinions get tracked and recorded and are part of the numbers I look at. I don’t subscribe so, I only see these numbers on late Thursday.
The point is, we have been in an extreme market condition since Thanksgiving, which is very unconventional. This means these guys are finally getting one right. That is amazing. Usually, you will see the opposite happen at certain thresholds just like clock work, unless something bigger is brewing. This may be just one of those times.
With the market showing no signs of letting up, I will only point out that we are currently up against some very strong overhead resistance. It has happened before, but the element of time helped to relieve that market pressure, but what about now? If we blow past these levels in the days ahead, I would be surprised. Is it possible? Anything is possible, but I think the odds say that we move sideways to down as more time is allowed to pass.
I do think the easing on the part of the Fed, is a very big part of this market rally, but who could prove that. The timing of their easing policy is right in line with the Thanksgiving take off. In any case, we are very extended and caution if nothing else is in order.
I got back to trading today as the data issues at Trade Station were resolved. I took 4 trades with three of them for OK gains and had one loss for only 1 tick on the S&P emini futures. Take a look below if you care to.
The loss I took for only 1 tick was an early entry and elected to exit it almost right away. Looking back, it only went against me by 3 ticks, but I did not know that then. Getting out was safer until the better timing entry just a few moments later, which happened to be at the same spot, but was then in a much better position to move out. I did not worry much about the two ticks of draw down after the second entry, because now things were in place. I missed one trade as marked with a no fill that would have been a good 1 point trade, but came up with a new long a few minutes later.
The price action in the market is very narrow and shallow, light volume. I often say, take what you can get easily and without struggle. If you start slugging it out, you are not entering at the most opportune time. Day trading is about timing and entering at the most advantageous times is what we should be shooting for. Don’t try and pick tops or bottoms, because you will be fighting the current momentum and anticipating a market reversal. The market loves to break through double bottoms and tops only to then reverse, but not before it takes you out.
Being exposed to price movements takes time. If, you look at the market price movement in any time frame, their is order there. It may look just like a bunch of up and down moves to the person with an untrained eye, but their is often predictable order within the charts. Not every move or section of the day displays this order, but much of it does. That is the part that you act on. Only that which you know to be true based on similar conditions of the past. We have all heard the term, “History repeats itself”, well, this is no different. It does not always do it in the exact same fashion, but elements of its past always present itself in the current days charts, enough for us to take action on.Three types of trade orders, buy -sell-wait.
This only comes from knowing what to look for and when to take action. There are three choices when making a decision about the markets. Some think that their are only two, buy and or sell. Those are two of the choices but their is a third, to WAIT. This is just as much a trading decision and would have to boil down to the most import element not only with the third choice, but within all of the day-trading experience.
Waiting to make a move has tied to it, “trade timing”. You are waiting for the best opportunity for you to extract your piece of the market and transfer that into your trading account. If you don’t wait until the time is right, you will force trades and your then your struggle begins. That is why I say, I like to take the easy and obvious trades with little struggle. The move should move out just after my entering. If it does not, then I may have been to early and have to question my entry.
When trading we always need to keep in mind capital preservation. If we are always shooting for the big move, we to often get nothing and minus nothing, a loss on the day. Sure, we may leave some on the table, but that is emotion of greed speaking there. We trade for income, so find your way to safely get what you can, limiting your risks while doing it and enjoy the fruits of your labor. Good Trading to all !
Timing your scalp trade entries is the key to keeping your risk low while moving towards your target and goal. That sounds reasonable, acceptable, and the thing to do, but most traders have a real hard time doing this. The reason, they just do not know that the market has a built in language to it, that tells traders ahead of time where it wants to go.
How would you feel if on your next trade, the market only moved against you by one tick? What if you could do that again and again. You would be doing pretty good. How about when you do take a loss, it is only then for two ticks with only on occasion 3 or 4 ? (ticks) Now, some would say, that would be a dream come true, but impossible to do. It is only impossible by those who think it, with their limiting beliefs. If you don’t think something is possible, then for you it will never be possible.
Our subconscious minds will never allow us to attain something that we first do not believe ourselves. Read that line again, as it is a very big reason why many traders struggle. So, first thing. Tell yourself that this is possible and I will become a successful trader.
Next, you need to take the steps to help yourself get to the level you want to be at. It is not going to happen by itself. The same way learning a foreign language is just not going to jump into your mind on its own. You will have to do something about it.
Back to timing your scalp trades entries. Every day, the market presents itself with opportunities. Those trading opportunities are present on multiple time frames across the board. Typically, the higher the time frame, the greater the risk associated with the trade. Finding the right balance that is tied to your trading personality is very important.
If your trading objective is to just pick up a few Emini points per session, than you need excellent trade timing. This can also be done while trading stocks and is no different in any way. Having a reasonable daily target, goal or objective, you can not allow the price to move against you very much. If you find that is the case, your entries need work. You likely need to improve on finding “The Hole”, the trading hole. This is the area a trade has the least amount of trade risk associated with it.
A trader may be able to pick the bottoms and tops, catch a few now and then and see his trade selection move in his direction and make more on the move with this approach. That is not “Sniper Day Trading”, as you will most certainly have to give the trade much more room to breath in order to account for this type of trading. You will see more stop outs and you will be trading against the momentum at that moment in time. I know some traders do this and it may work for them, but it leaves to much risk open for other traders to run the stops and take you out at your threshold only to then see the move go in your favor, but without you.
Their is another way, by leaving some of the trade on the table upon entry, but at times have the ability to sell into strength or cover into weakness, towards trade to targets. Here, with my method, you will at times see clear area’s that you may want to wait for. They could pay off big if you catch a couple of them.
If we take the “easy and obvious trades” we will not be putting ourselves at risk, but what is easy and obvious? You just need to know how this game works. I don’t want to talk in riddles, but their is so much trade structure that happens every day I can not begin to tell you. Actually I can’t tell you, because I would be revealing my method. I have never seen anyone trade and put the market structure up on the screen as I do. I am not the only one in the world I am sure who trades the way I do, that would be a bit presumptuous on my part.
By and large, those to take my training see things they never saw or even knew existed, in the charts. The price tells all and the indicators can confirm. On most every trade, I always see it building first and getting into position. One thing I can say, the market is like a power plant, building up energy only to later be released. Knowing how to spot the energy and its likely path of release, will give you the edge to prepare and then take action when it all comes together.
Going back to an earlier statement that can help those struggling, “your believes about your ability to trade successfully and about money will determine your outcome”. Traders need confidence and the only way to get it is do the right thing at the right time and you get rewarded. The opposite is true. Learn how to trade the price, learn how to limit your losses, learn how to enter with little or no draw down, learn to be patient, learn to be disciplined and you will build confidence and your trading account. It is possible, learn.
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In my trading today, I took 8 trades and had only one loss for 2 ticks. I played it very conservative with the following trades of / Flat / +9 ticks & +4 ticks / +4 ticks & +6 ticks / +2 ticks / +4 ticks & flat / -2 ticks on smaller size / +3 ticks & +4 ticks / +4 ticks , +5 ticks , +9 ticks /
I could have traded for extended runs today, on a few trades, I certainly did have the room in the market for it, but just controlled myself for the smaller scalp trades. I thought to do a video today since the price swings were a lot better.
Today is Monday November 8th, 2010 and we saw a slow narrow range today as the S&P and Dow backed off their most recent new high ground with the Dow off -37 and the S&P -2 for the day.
We saw a slow narrow range today as the market gaped lower to start things off. We did see another gap filled today, but it took most of the session to get it done. As you can see over the last few weeks, most all the gaps have been filled within the same day or by the open of the next session.
We do have a large gap that is still open from a previous session and would be a good idea to remember where it is and when it happened. It happened 3 sessions ago at 1198 and as mentioned is still open.
I would be watching 1215 for Tuesdays session as an important area of interest. If that area gives way, it is possible the market will work its way back down to fill that gap. Currently in the night session the market is off several points and sitting just above that number, by about one point, so we shall see what happens in the morning.
One interesting thing to note is the Dow never came close to filling its opening gap even though the S&P did. That too is important to know and remember going forward.
In yesterdays blog, I was talking about how important it is to understand how a certain elements work together to give a trader the statistical trading edge. The elements are “time, space and energy”. Space would amount to the movement of price, since its travels are done in an element of space. Understanding all of these elements are important. Some do have a higher value than others, but all are essential.
The element of time is the first one, which traders are required to wait. That waiting is a component of time and essential for the price to work its way into position for its next move. Without time, space (price movement) would not exist and so is needed. It is in passing of time that allows traders to establish there positions and creates price movement, the second element. There is a right time and a wrong time to enter a position. You want to learn when to enter at the “tipping point”. An exact point of time that prices move in your favor with little draw down. That is not always easy to do but it is possible. Enter to soon and you incur additional risk and potential for loss. Enter to late, when the move is now seen by all and you risk being the answer to someones exit, by taking the other side along with everyone else. It can be summed up in two words, “Trade Timing”.
The second element is space, where prices move. Price moves through definable boundaries created by its participants. Those boundaries take place over time and are often well established. If you can spot the trade boundaries and allow time to work for you, you will begin to possess the trading advantage. So, you are allowing time to pass so that price can establish trade boundaries that are definable to you, the trader. So far we have the first two elements working together to create and give you that trading advantage, time and space.
That brings us to the last element, trade energy. This element is not often thought of, but is key in working with the first two. The energy is essential to the move in that, it is what drives the price higher and or lower. That happens at a specific time as discussed, but the energy is what moves the price through space, the second element. All three are working together. As time passes, energy is often building, depending on the definable boundaries discussed above. The way that happens is again first by the passing of time as traders establish positions above and below boundaries that they feel is important to them. When you can identify which area’s are of greatest importance to the largest group of traders, you will often be able spot “stored energy”. It is just sitting there. Here again, you will need the passing of time to allow that stored energy to build.
Generally the bulk of traders and investors think alike. Thinking as they do to better spot where there stops and being prepared to do the opposite can be one way see these area’s. Price establishes itself through space by creating highs and lows. Each high and low says something as pivot points are created. Its understanding this language and the combination of all three elements that creates the trading advantage we seek.
Sniper Day Trading seeks to exploit those three elements to put the statistical trading advantage on my side of aisle. When I can do that, I pick up winning trades. We don’t need a lot as we all know the futures market is highly leverage. The key is better to keep risk low and gains consistent, even if those gains are at times small.
There are key spots on a trade screen that represent small windows of opportunities. If we hit these windows of opportunity right, we keep risk low and have a high degree of success in hitting at least a modest target. We come to learn what price should do at these small windows and when it doesn’t do as it should, getting out does not have to be letting your stop get taken out. Managing the trade is very important, but doing the first part right, this part is much easier as you will be looking to take your profits and not running for cover.
All of this takes time and an understanding of how price action works in conjunction with the elements discussed. Trade indicators are only a reflection of the three trade elements discussed above. They can help you see what is on the screen already, but are not able to identify, because of lack of knowledge and screen time. This is something that can and needs to be learned, so don’t be down or hard on yourself if you are not make the progress you hoped for. More tomorrow……. Today’s trades below.
Today is Wednesday October 20st, 2010 and the markets came back to life after yesterdays sell off.
The market is not out of the woods here and I don’t really want to tout my last call, but so far so good. We will have to see what tomorrow brings, but the trend is still intact, so the benefit of the doubt has to go with the bulls right now. We are coming up to the election and a strong sell off in the markets will likely seal the fate of the those in power. I think damage control is the call they are making right now. This would suggest some form of market manipulation, well, I am sure I am not the first, and won’t be the last to make such a suggestion.
Their were some good earnings reports out today and it may have been a good excuse to buy, for those whose purpose is to do so. They did and the S&P retested its previous highs of 1180. I did say on Sunday evening that we could or should see higher price of which would close in on 1200 S&P early in the week. Well, we may just have to wait a few more days for that, but it does look likely that it will come soon enough. The surprises have been mostly to the upside as traders and investors are getting it from both sides. Fear of loosing a lot, (short covering) and fear of missing the move, both rolled up with a lot emotion.
Tomorrow I will report on this weeks new market sentiment numbers that were out today. We will see if the slow weekly increases continue as they have, an inch at a time over now the last 7 weeks.
In today’s trading I only took a few trades all of which was encompassed around one area. I was trading for only about 30 minutes today and did pick up what I wanted. Their were a bunch of great opportunities that could have been had after the open. I included an extra chart today, because my closing position was not until late in the day. I did not have time to get back online and close it out earlier. Its to bad because their was plenty of good exit area’s at much higher prices. I planed to come back and check in the early afternoon, but couldn’t, no big deal. More opportunities in tomorrow session.
Just a reminder, the indicators in the charts below are not the trading method. I have to remind those who look on to that fact. They are only their to confirm or deny the method entries of which is based on something completely different. This is the smallest time frame chart of which I use as the other charts are integrated into this one. The basis of the trading method is following price action. Their are a complete set of guidelines to follow. It is a very sound methodology as many traders have been successful in applying its principles. With all that said, using just the one trade indicator I have here can help you improve your trade timing a lot. Holding you back from getting in to early and such. My first trade today, I did enter to early, in an anticipatory move. It proved me wrong with a 5 tick stop-out. The rest were a bit better allowing me to keep my risk low and take the move to higher ground. OK, That’s it for today,
Today is Wednesday and we saw moderate gains again for the S&P (+6 points) and Dow Jones (+44).
The last two days the market has marked time by moving sideways for the most part. During this quiet time there has been a lot going on, even if it does not look like it. This quite time is just what needs to happen.
When you sit down for dinner, you eat, enjoy and wait to let you food settle. Well, the market has been settling it’s meal and I think it is hungry again, or that is what it looks like to me. I think we are ready to see new advances for the Thursdays session. This will be keeping with the spirit of surprise and amazement as this market just seems to not want to quit, or that is what they should be saying soon.
We should rally on Thursday, or at least that is what and how I see it. I could be wrong, but I see S&P at 1140 somewhere in Thursdays session. Currently in the aftermarket the market is going the other way. Here is a case where I believe we will see the market come back and sometime during the early morning session, we should be pushing into new high ground. That call would be the normal and natural move for this market Will we come back up several points to reverse and go higher into the morning session, time will tell. I could be w rong, so don’t go out on a limb here on my say-so. I have been right so many times in the most recent past and will get a better idea by tomorrow mornings open, but I may not be up at that time to really comment.
I am just getting back home from a short trip to the S.F. Bay Area. It is about 310 miles one way to where I usually stay with family when I travel that way. It takes around 5 hours with most of the way traveling at 70 mph. Currently its 12:30 a.m. on now Thursday morning, so again, I don’t see myself hitting the morning session tomorrow. In addition, my wife has family visiting, to help us celebrate my 48 birthday on Saturday, not that its a big deal, but what the heck, why not. Sorry there, I got off a tangent, I must be a little delirious from all the driving.
I did not get a chance to trade yesterday, but I did squeeze in an hour or so of trading today making some very modest gains. I have a screen shot below of all the trades I took today.
I cant’ say to much more, so I will end it. If day trading, be nimble and don’t get to strong on any one direction. The market can do what ever it wants. Just read the action and go with it. Trade timing is key, so trade with the rhythm of the market if you can find it. Good Trading, Vince
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