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If you're looking at the depth of market then you can judge how far the market is likely to move based on how many contracts are trapped on the wrong side of the market. So if the market has been selling off, lets use es as an example, you'll be looking for everyone to get stuck selling the bottom. One you have an area with over 100,000 contracts absorbed then you know that will be a much bigger move. You also want to look at the market relationships and understand how they work. For example if the dollar is up 0.40% on the day, crude down 0.70% on the day and ES is down 0.30% on the day then you know that ES has to be positive at some point during the session , so any longs in es you have you will be looking to hold them Hope that helps

You need to have a plan laid out before hand which states how you're doing to deal with the volatility. The problem for new guys is that volatility gets them emotional, and that's when you will have poor judgement in the heat of the situation. If you plan for volatility before the day starts and lay out a process of how you will deal with it then you'll be ok

I've sent you a private message

As this guy said. If you come from a professional poker background than you have a very high chance of doing well with day trading, it's just a case of learning how to use the right tools that are specific to trading As with poker, sometimes you're up, sometimes you're down, but it's just about winning more than what you loose. Most people say they understand that they take losses along the way, but not many people really do understand it or expect it, and as result they just can't handle that side of things. As a professional poker player, you understand what the craic is so i'm not gonna patronise you For the new guys.... with any business or any adventure that involves risk, you gotta be able to take the good and the bad and the happy and the sad. As I said above, sometimes you're up, sometimes you're down and when you're up it's never enough, and when you're down you think you're never going to get back ontop, but control your emotions, play the game and understand that for every low there's a higher high and heaven will never seems far away.

Day Trading is far from dead. The day trading dies, is the day we've got bigger things to worry about, like and end of the world as we know it. The article is mainly about trading equities where volumes are spread a lot more thinly over various individual stocks within an index, unlike futures where you're trading the underlying index or commoditiy. Trading did use to be a lot easier, but at the same time, I wouldn't say its got harder providing that you're day trading properly. What has happened is that basically it's come to a point where if you're going to day trade, you have no choice but to learn the mechanics of trading now, and to do it properly. As I mentioned in a another thread, the majoirty of the market is always looking for trends, even tho the market spends 80% of the time in a range. So essentially you have lots people who have taught themselves how to be chart analysts inadvertly thinking that they're trading. Over the past couple of years, they were able to get away with it because of the monster moves and trends, which gave a lot of people a false sense of security. Most of them people are gone now, and you can tell that from even from how quite the forums have got. In the prop letter, he stated that the days of someone being able to grind out a $50k USD a year living are over and that they're going to cut these 50k a year traders. Fair enough in my opinion, everything is relative, and if you're only earning 50k USD a year from trading, then you're not exactly an amazing trader. If you're 'trading' and not analysing, then it's just a case of adapting to the conditions. What is happening is the same as what happened on Eurex around 2006. Lots of people made good money when it was easy and were not talented enough to adapt to new conditions. The only differences is that back then they were blaming the flipper. Same stuff just another cycle, people blaming everyone/everything except for themselves.

It all depends on your trading style. As you mentioned in your op, most of the time, if you just buy support or sell resistence then the market will just smash through you and stop you out. If you're a swing trader using a large stop and trying to capture the bigger move then this isn't so much of an issue. However, if you're a day trader, then you need to understand how day trading works and where the key trading opportunities are. The majoirty of the market is always looking for a trend and is looking to jump on the back of anything that moves hoping for a break out, which is why you see the trading activity that you do around s/r levels as you mentioned. I've posted this video before on these forums, but it's a great example of how the market just smashes a resistance level at 1181 in ES on the 18th of October. Anyone selling resistance there as a day trader, most likely got stopped out or took a heck of a lot of heat before the sell off. If you're day trading, then you need to learn these concepts to profit consistently. [ame=http://www.youtube.com/watch?v=AAc1vJREAlQ]YouTube - Day Trading ES 18th October.avi[/ame] Something that I think has highlighed this recently is all this stuff on the internet saying that day trading is dead. The reason why people are writing all of this is because the market isn't trending, and as a one trick pony, they don't know what to do. The days of massive volatility made it easier for less talented traders to make a living. The reason being is that they could have 3 losers in a row for 2 points each, then have a big 10-20pt trade that knocks them into profit, thus not requiring massive skill in my opinion. However, now that the markets have settled down, now more than ever, you need to put the time in the learn the right skills. It's not all about hollywood trades and big trends. An example would be when many people look at European markets, they think they're dead as they don't have monster moves or trends like the emini's for example. However, people obviosuly make money trading them by understanding the flow of orders coming into the market.

Anyone remember that blog of the guy who built his account up to about $50k in around 2008, thought of himself as an expert then lost it all on one trade as the market tanked - It was a video... prime time comedy and a great example of what not to do. Anyone know what I'm on about?

In my experience, ES tends to reverse on the first major s/r level that it hit's in the morning, weather this be closing a Gap or a level as simple as the globex high or low. If you look at a 30min chart for this week, you'll see what I mean. A market where trading the gap is very clear and highly effective is the bund. If gaps are something that you like trading, you might want to have a look at it as well as the markets you currently trade.

This chart is form the video that i posting in the trading futures with volume. For those trading ES, it's a 30min chart, and you can see how it has traded up to resistance on a nice divergence. If you look at your charts, you can see what happened afterwards.....

What has already traded is great for finding levels, but that's about it in my opinion. Seems like you're using something along the lines of market delta, which is not something i'm a fan of, as in my opinion it suffers from a few fundamental flaws. First of all it suffers from the frame trap as it is plotted just like any other technical chart, and secondly all it is showing you is what is trading at each price, which is only half the story, while on the order hand, your dom tells you everything. To use an analogy, if you're playing poker, it's not soley about what cards you have or what the other players are betting. There's the old saying in poker that you play your opponent and not your cards as you need to work out if they're bluffing or not, if they're trying to buy the pot and so on etc. When you're reading order flow on your book, you're seeing everything you need, that gives you that 2% edge. The margin for error in trading is so small (the speech from any given sunday comes to mind here!), so all them 2%'s add up to make a significant difference. It's the difference between those who are consistent enough and make it, and those who blow out. Like I say the margin for error is so small that you need every edge you've got.

Just following on the post I made about how volume divergences are useful, I made a video of a trade that I took yesterday off the 1181 reistance level in ES. The market traded up to the level on a divergence, then one just needed to read the order flow there to pin point the entry. The video can be viewed here: [ame=http://www.youtube.com/watch?v=AAc1vJREAlQ]YouTube - Day Trading ES 18th October.avi[/ame] You'll need to watch it in full screen to see the detail. I should of recorded it in slightly higher quality, which I'll do for my next video. Also what happens at the 1181 resistance level is a great example of a post on the blog called cat whiskers.

i've got a few articles about trading psychology on my blog, so have a look as they cover most aspects of trading pyschology

Completely right.... once you understand the key concepts of how the markets work, then there's many ways for one to make money, and the only right way is the profitable way. The problem with a lot of people is that they don't understand them key concepts of how the markets work. I'ts like a car engine. If you understand how an engine works, then you can fix it, tune it, or whatever tickels your fancy. If you haven't got clue how an engine works, then you could well find yourself stuck at the side of the road scratching your head, when all you need is some gas. I know I can come across as I'm saying my way is the only way, but I don't mean too I'm just emphasising the basics one needs to know before they look into other methods/strategies. To use another anology, trading is like joining the army. At first you gonna do basic training to learn how to shoot and hit a target. After basic training, you then branch over into whatever you want to specialize in. In trading you need to learn how to use the detail volume first to read order flow. Once you know that, then you can learn whatever suits your personally, which could be market profile, fibs, VWAP etc, wave theory and so on.

Depends what you're looking for. If you're looking for the cheap as chips route, then there are the ones that you have mentioned. Personally I don't like the investor r/t package as i've found it buggy in the past. One thing that's worth noting is that there's normally a $50 a month fee to be paid for market profile, however, if you get the fin alg market profile for Ninja Trader then there's just a one off fee to buy it, which in the long run will save you $$$ If you're already an established trader, then just stump up for CQG. On a side note, if you're new to market profile then in my experience, the most effective way to use market profile is to understand the market structures. By understanding this you will be able to see when the market is in value, short covering and long covering through P and b structures on the profile. By knowing this then you can then choose how you're going to approach the market to take advantage of the market structure. I'll make a post on my blog about market profile for those who are interested

I'll throw in my 2 cents as usual..... As with all my other posts, I'm always banging on about order flow, because you need to learn this first, then build the rest of your trading ontop of it. However, lets say you already know order flow, then you can start to use other support tools such as technical analysis and basic volume to identify key areas to be trading. Now a basic, yet very effective way to use volume is to look for divergences between volume and price on key time frames. Yesterday was a great example on ES after lunch time... look at the screen shot and you'll see what I mean. Once you know how to read order flow, then basic volume is very effective in presenting you with very strong trading opportunities. Volume is a very broad term with many aspects that come under it, and some people argue that order flow is appart of volume. However order flow gives you the detailed information of exactly what is happening at each price that allows to pin point enteries. Basic volume on the other hand, as mentioned, is excellent as alerting you to key trading opportunities, but shouldn't be used, in my opinion, to try and execute trades. There's a difference between a trading opportunitiy and trade execution, and as long as you use volume correctly then it is a very useful asepct of trading futures. In my opinion, most have problems using volume as ulitmately they're trying to use it for execution, which is why many people get into a trade, get stopped out, only then to watch the market rally to their original exit without them.

Pretty good article. I always appreciate someone who puts a bit of effort into their work, I like your style.

That's a good point, my blog is solely about day trading, which i forgot to mention

I know, who do they think they are lol? On a serious note, it does annoy me when it's clearly obvious that someone can't even tell their left from their right, yet they trying to tell people how to trade based on a 8 months experience and a handful of lucky trades they've had recently. In my opinion, when a new retail trader is researching the internet for trading ideas, they should just do the complete opposite to most of what they're reading. If you sign up to some crappy $500 webinar, then you'll probably make money if you sell when they say buy lol

Personally I think market delta is useless, but as to which is better, if you want to use it then get it from market delta. Ultimately in this game you get what you pay for, and if you try and do it on the cheap, then you're going to have an inferior product meaing that ultimately, you're just selling yourself short. Free data with a cheap add on won't be as good as getting the full bangers and mash. In for a penny, in for pound as they say....

This is what I don't like about trading... all the daft buzz words like the herd, the edge, the money show.... In my opinion it's all bollocks, there's those who know, and then there's those who don't know.... it's as simple as that really. This is all my personal opinion, and I'm not saying my way is the only way, by my opinion is based years of professional experience. I know it might seem a bit grumpy, but I think most in the retail community just need to shut up and get on with it. I think people spend too much time trying to talk a good game, rather than spending that time trading. Instead of asking themselves why a trade didn't work, instead they spend their time seeking a buzz word to attach to it. Not that anyone is probably going to listen to me, but that's why 95% don't make money, because 95% think they know better than the professionals. It's as simple as that. Also when I refer to professionals, i'm refering to prop traders in the city, investment bank trading desks, hedge funds etc, not some guy sat in his bedroom trading 5 lots who thinks he's big time with his bingo bongo setup. It really is so simple and it's a great example of the saying 'all you need is common sense, but common sense isn't actually that common. Like I say, 95% think they know better. An example would be, i've made posts before on this forum about the importance of orderflow if you want to day trade, and without fail, there's always some dounut that comes out of the wood work dismissing it, or trying to pull my post apart to give themselves the big I am. Fair enough I say, most people you can tell them exactly what to do, and they won't listen to you, and that's why most lose money, and only a few make money Too much uncontrolled and unjustfied ego's in retail circles, which is fine by me... more people to take the back out of.

Most of technical analysis is just a self fulfilling prophecy, meaning that if every man and his dog is looking at a certain level, then it's likely to be important. You want to trade the blindly obviously levels to start with that everyone can see. Don't look for s/r or tiny times frames, look for s/r on the 30min, 60min and daily etc. If you're new, check out my blog, I made a post yesterday of a list of tips to get you started.

Big Mike as in big mikes forum? The only thing I would say about that one is that, when I was looking at it, there was a big thing about 'the hurrley trading method'.... After that i've never been able to take that site seriously

I'm not saying that TA has no place, it is a useful support tool, but as I mentioned in another post, every half decent prop firm that i've ever seen will make their traders look at nothing but the book for at least a month. There's a reason for that, and what you should take away from that is if that's how the professional industry train their traders, who have a way higher success rate than retail traders, then maybe, just maybe you should be doing the same? When I refered to TA in my previous post, I was refering to price charts which are just a representation of the past, which it is, no matter how you try and cut it. The order book on the other hand is what is happening right now, which is extremely important. Higher time frames then it's a different ball game, traders managing funds long term etc. I've never traded in this way personally, but my friend who used to sit next me at the firm I started at, he does all that stuff now days. He was completely hopeless at day trading, but his fundamentals were second to none, which is what he trades. Like I say, his track record is faultless, but like I say, not something i personally do so I can't comment So many different trading styles with different methods, but if you're a day trader, in my professional opinion you need to learn to read what is happening now, not 5mins ago. There's always going to be someone who says they're doing well using just XYZ and not using order flow etc, but even if they're are, they're not doing anywhere near as well as what they could be if they knew order flow. A good example would be that there's been loads of people moaning as of late about how quiet the markets are, but if you take the time to learn how price trades on the book it has been quite easy this year really.

The biggest road block for retail traders is pandora's box. In my opinion and experience, 99.9% of retail traders are chasing and worrying about things that actually have no important relevence to profitable trading. Most of the retail community are focusing on learning things that are going to get them no where. It's like building a house.... but focusing on the garden for the whole project... no matter how nice the garden is, it isn't going to build that house. If you learn how to trade professionally, any self respecting firm won't let you look at any charts for a month at the minimum. This is why I call it pandora's box, as when a retail trader gets involved with trading, they're opening pandora's box and making all the unimportant things important, and all important things unimportant. Most have it completely back to front, but instead of realizing and accepting that, they'll say it's the mental side, or it's this or that... basically they're blaming themselves. The truth is, if you're trying to make a cake with a sledge hammer, it doesn't matter how disciplined you are, how mentally strong you are, how devoted you are etc... it just isn't going to happen because you can't make a cake with a sledge hammer, just like you're not going to be consistently profitable as a day trader by just staring at charts and techncial analysis, or following indicators or systems. You need to learn how to trade if you want to make money from trading. Don't learn how to be an analyst, and then be surprised you've made no money. At the same time however, 99.9% of people on this forum have made no money, but as mentioned, most will think there's something wrong with them and that they're their own reason why they have not succeeded. Like I say, most of you are following the piper over the hill into the magical forest, so it's not a reflection on your personal ability to trade, it's just a reflection of the b.s that you're following... Just my 2 cents

If you're a day trader, then technical analysis is only a support tool and shouldn't be something that you're using to find or justify trades. Learn what is happening on your order book, then as already mentioned, use technical analysis along side that as a support tool. A lot of people in the past will reply to such as post by giving it the 'big I am' by saying that they've been profitable for years with technical analysis alone. The first thing that pops into my mind when I read something like that is 'what a load of rubbish, as i've never met another professional day trading using just TA. I'm not going to mention names, but them ones who give it the big I am, i've noticed haven't made any posts on any trading forms for well over 18months now.... main reason probably is that they've given up trading as they only focuse don TA which got them no where. There's no shortcuts in learning to trade. You just have to do it probably, that's all