I am primarily a day trader. It’s not that I won’t hold positions overnight. I do, as there is a strong edge at times for holding a trade though the overnight session to try and capture further price movement the next day.
What I look for
But as a day trader, I am keen to try and find the day’s low or high and try to trade from there. Today, I was looking for the market to react and go lower, so I was looking to sell the high. I was wrong, which happens frequently. But that really is no matter when you understand how to read the charts. This sounds cavalier, but I don’t mean it that way. It truly doesn’t matter what your game plan says. If the market isn’t trading that way–as today–then your game plan is wrong and you adjust. The important thing is that you have a game plan. It also is important to have a little mental flexibility so you can adjust when your game plan isn’t working. Holding tightly to a bias when the market tells you differently is never a good idea.
So, coming into the US morning session I was looking to go short. However, the pre-US open was showing strength. So that immediately put my sell short idea on hold.
What I saw & what I did
What I saw was the 27,000 tick chart continuing to be up (green arrow). Note the low downside volume on the Weis Wave (definitely my favorite indicator), the EMA refusing to roll over, and the 3-10 remaining strong. Well, with all that strength, how could I go short? I thought, “OK, I’ll take a trade long to retest Friday’s high.” Even then, I was anticipating the rally up to be weak and then to go short. But it wasn’t weak.
Instead, the 3,000 tick chart showed good strength in the Weis Wave chart and the 3-10, confirmed by the higher time frame. No reason to take the trade off, and so held it until demand weakened just after the red arrow. A nice trade.
Day trading is tough to master. It requires good chart reading skills, flexible psychology, and sound money management. These take time and experience to develop. Trading is not for the feint of heart, but the skills certainly can be developed.
Chart Reading Mastery provides over 16 hours of in-depth chart reading instruction in the Wyckoff Method. This is reading the market by it’s own actions — primarily through volume and price action. This will always trump indicators, though some indicators–if you really understand how to use them–can give you clear insight when you also understand how to read the market by price action and volume.
If you are interested in learning to read the market by it’s own action (price action & volume), you are invited to check out Chart Reading Mastery–8 weeks of in-depth chart reading skill development. This is all that is needed for learning the technical side of the market. You can learn more here: Chart Reading Mastery
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