When I first became a trader many years ago I would watch CNBC thinking they were the knowledge of the market. Taking the next big trade they had and I would be so excided to jump into it, I almost always would end up holding the bag on the wrong side though. Then months after I had done my own research, testing etc I found a trade on my own and placed it. I was long Yen into the night waking to see it amaizingly in my favor. So much so that it was all over CNBC. I unmuted the tv to see what they had to say but they didnt have anything put together except wow the Yen is really moving, this should come back soon and resume the trend. 4 days later the move was still running and they came out and said there reasonings why it moved so much so fast.

CNBC is great but always remember they are just news and if you do take any insight from them make sure it is market sentiment. Often times if 98% are long it will only take 5% to get a bear sell off started.

Inter-market Analysis can be a great tool at times but don’t get married to the relationships you find. For the 2003-2008 market rally Gold and Dollar were almost always opposite and in all series 3 test books Gold is the ultimate Dollar hedge. Countless times this showed untrue over recent years rallies and slides. All in all it doesn’t matter what the correlation used but that you do not get married to it. Understand the market you are trading first and use I.A. to back up your thoughts. Have a great day!!

Trading price alone only has one advantage, it gets a trader away from those double lagging indicators. Other than that its only benefit is to show where things are at. The ultimate and biggest underlying factor in becoming a profitable trader lies in supply and demand. It gives the reason why  price should move along with the direction. Price is only there to follow the road map set by S&D. I am sure you are wondering how one must go about reading S&D. It is not by any type of chart pattern (that can be found in any weather chart) or any other funky astronomy or magical computer. This is where the screen time comes in. Have a great day!  ;)

Probing a market is very beneficial when done at the correct times and gives a birds eye view of the current health of the market in that particular area.  The correct times to probe are during wash outs or when a trader believes a market is being taken over by sellers or buyers. This is often done by large traders to get a read on the market but is rarely if ever discussed.

How to Probe: If a trader believes a market is taken over by sellers and that the market is about to dump off a cliff he should fire a couple singles off as market sells. Sending a sell market will instantly send a order looking for the nearest resting buy order and if this order is 5+ ticks away from where it was  submitted this shows  that there are very few buyers in that area.  Once this has been discovered a trader can now put on size and know he will be one of the last sell orders filled. From here it is only a matter of time till the manipulator will throw size at the market to crack it for the run of the cliff.

Again this can be used in many different situations but gives the best view of supply and demand and also keys you into the order book showing the fake side.

Happy Trades

Dont let the news anchors scare you just because they may be. All the people on TV are talking of these markets as hard to read and unpredictable. As a trader these markets are Candy Land, trends are long and there are many signals a day opening up the risk reward opportunity.

Just for fun put yourself in a brokers shoes. Your analyst tells you that stock xyz or commodity for that matter looks like ag great buy so you open the terminal and jump in. 5min later you are up 10min later you are down and these swings are ten times what they were a few weeks ago. Even if you are a long term holder your clients will most likely call and ask what with all the volatility. The end result is, brokers are only salesmen and (most) cant trade themselves out of a paper bag. (and in no means am I knocking them) While the few that are profitable traders smile all  the way to the bank.

Have a great day!!!

Many times when traders think of volatility they think of risk but in most cases they are wrong. The risk should not be any greater than the usual. As long as the tape is still thoroughly scrutinized the risk will continue to be the same but the reward will be a lot greater! So all hail the volatility and let it stick around for a bit….. Have a great day!!

Painting the tape with today’s technology is a lot different than it was long ago. Now days the Depth of Market is where all the games are played and it costs a lot less! The video below shows a DOM a few hours before the Fed releases rates. You will notice the big sell orders luring novice traders in. Some say this is a common practice of Paul Rotter a.k.a. the Flipper.

This is what a Profit and Loss should look like if you are a CONSISTENT and PROFITABLE scalper.  Happy trades!!

Trading Price Action is one of the biggest keys in trading. It helps determined the direction of the current market and shows how strong a level is. The best way to use price action is to set your chart settings to Candle Sticks, this will allow you to see the wicking, hammer, doji etc…. This is a huge help when it is accompanied by market structure to give the overall trend or to signal when a market is about to roll over or pop. Here is a video that shows how the use of price action against strong levels can produce amazing results. Happy Trades!!! http://www.youtube.com/watch?v=kKGznMgHbh4&feature=feedu

Another day getting up before the sun rises to run that mile and clear the head.

Every day before I get into the office I make sure my head is clear and ready for the day. I run a mile or so to get the blood flowing, stretch then S.S.S. and meditate for 15-20 minutes before eating and sitting in front of the screens.

I do all of this just so I come into everyday with a clear and focused head. Allowing me to use my edge to the best of my abilities.

I would highly recommend it! Have a great day…