Soultrader

Its good to keep an open mind and constantly change your bias as the market condition changes. Markets change every single second. That is why it is hard to tell anyone whether to go long or short. I can might change my mind and reverse my position a few minutes later.... so watch out when getting a second opinion. Just by taking a quick glance at the daily chart, we are in a very interesting spot. August 18th's price rejection may not be a legitimate one. on August 18th, price broke out of the key resistance at 11400. The following Monday on August 21, the markets gapped down below 11400 and never filled the gap. This information led me to believe that we may not be able to break that crucial 11400 level. The entire week from August 14 - August 18th, we saw higher value placement. During the week from August 18th - August 25th, we saw price trade in value (consolidate) and lower value placement. However, we had a significant rally yesterday with a higher value placement and decent volume. This rally was important for prices to remain above the trendline and respect it. We are also forming an ascending trianlge pattern. Price is trading above the 8, 21, 50, 100, and 200 period moving average. Technically speaking, price says that we have a good chance of going higher. If you are looking to swing trade the dow, buying the breakout of the August 18th's high with a stop 10 points or so below 11400 looks like a decent opportunity.

The YM closes at 5pm eastern and halts to 6pm eastern. So I will take whatever low or high was made from 6pm onwards. I'll usually take a look at the markets around 7:30am - 8:30am eastern and set my charts to a 24 hour chart. This pretty much shows me everything information I need. I will have my charts set to a 24 hour chart until 1-3 minutes before the open at 9:30am eastern. I will then set my charts to a gap chart.

Many professionals know the important of the S3 and R3 pivot. Prices will tend to stay within this range. Why? It just does. The S3 and R3 pivot are terrific pivot points to fade. I will take them 100% of the time. Of course trading is a game of probabilities but fading these two pivots offer a high probability trading opportunity. Price will remain between these two pivots 80% - 85% of the time The chart picture tells it all.

After prices held the globex low at the value low pivot, we had clear indication that price was going to trade within or above value. In this example, we had prices in a decent uptrend. Overnight session price acceptane vs rejection can act as key information to guide you in your trading day. Notice the 100+ rally from the value low pivot.

Here is a good example of an overnight support. The markets trade right below value low just to find support to push prices back into value. Take a look at the long red bar at the far right edge of the chart. The tall wick shows price rejection below the value low pivot. This will be a key pivot to watch going into the trading session. If the premarket action does hold this pivot, this is a good indication that price will not trade below the value low pivot. Also, instead of shorting the break of the value low pivot, you need to understand the globex low made. This will act as support. A safer setup to trade the break of the value low pivot is to short the break of the overnight low.

That could work too. Take a look at this thread. It shows you a simple strategy using moving averages.

It plots 233 trades per candlestick bar instead of time. I use 233 because its a Fibonnaci number.

Here's another good book. The Psychology of Trading - Brett N. Steenbarger Actually one of my favorites. It has a different approach to explaining trading psychology. Another book I recommend is: Exceptional Trading - Ruth B. Roosevelt Recommended by a trading buddy 6 years ago. Worth checking out. She has another easy to read book. 12 Habitudes of Highly Successful Traders - Ruth B. Roosevelt I own both these books as well.

I base my trading on pivots. If price is unable to remain above a pivot level, I will look for a reversal trade. For example, let's say my key resistance on a stock XYZ is $50.85. If prices trade to $50.80 and can not break above the $50.85 mark, I will look for a short setup. If there is a RSI divergence at a pivot level, that becomes further confirmation. The 10:00 am reversal is also something I pay attention to as well. It doesnt happen 100% of the time, but is a fairly common pattern. I focus on key pivot cluster levels as key support and resistance. I will look for prices to reverse around these levels by reading tape.

On top of knowing where the previous days high and low is, it is important to watch for the globex high and low as well. These levels can act as key support and resistance point. One strategy is to go long at the globex low and short at the globex high. Any break above the globex high is a long signal and any break below the globex low is a short signal. One important pattern I have been seeing recently is whenever prices move below the value area during the overnight session just to have it pushed back into value. This level below the value low pivot acts as key support during the trading day.

I would have to say yes. I played professiona poker prior to trading. Probably the only reason why I changed careers was because of its similarity. One thing I learned from poker that has helped me in the trading businesss is discipline and consistency. There are two kinds of players. A cowboy and a true grinder. I was a grinder aiming for consistent profits on a daily basis. Alot of poker players will never make it as a trader though. Most of the newcomers now play for the excitement and not for the money. When I used to play 10-14 hours a day, poker was complete boredom. After a while, you design your own set of rules and system to follow by. You add a couple tricks here and there but overall the game is the same. Discipline and patience. Trading is the same. At times trading can be extremely exciting. Other times completely boring. From my understanding, Chris Ferguson, the 2000 WSOP champion is a trader also?

Many traders are familiar with pit noise. With the advancement of technology, any trader can receive live pit noise directly on their computer for a nominal fee. Although the edge of being a floor trader does exist, that edge has signficantly reduced over the past decade. With level 2 quotes, fast execution, pit noise, etc.... private traders are now playing on a equal field to floor and insitutional traders. Pit noise is crucial if you are an intraday trader. I can not imagine trading without it. For those who are unfamiliar with pit noise, this thread is for you. The main channel that should be used in intraday trading is the big S&P 500 pit noise. This is where the big boys play. The S&P 500 usually takes the lead, followed by the dow/russell/nasdaq, and equities. So understanding pit noise gives you a slight edge and sometimes a heads up signal before price. At first, pit noise can sound annoying and complicated. To a new trader none of the lingual will make any sense. Constant yelling of numbers, names of market makers, top tens, etc... You will first need to learn the terms. A full comprehensive list can be found here. CLICK HERE FOR PIT NOISE LIST Go over the list and learn the basic terms. Listen to the pit noise afterwards, you will be surprised at how much information one can absorb from all that chaotic noise. Obtaining pit noise is easy. This can cost anywhere from $100 - $200 a month but is worth every penny. Do a google search on pit noise or private message me. I may be able to send you a special discount offer from my former vendor. Here are a couple things you need to know when listening to the pit noise. 1. The commentator or speaker can become very emotional and energetic when order flow is heavy. Try not to get over reactive yourself. Stick with your plan. Use pit noise as a different set of tool for your trading. 2. The pit is the noisest in the opening hour and last hour. Also, you will be able to determine if the pit is crowded or not just by the level of the noise. The pit gets dull before national holidays. You can tell if a market is going to be choppy and nontrending just by listening to the level of excitement in the pit. 3. The pit is the center of human emotions. You can hear the voices of panic and greed. If pit noise is extremely high during a uptrend or downtrend, this is a good confirmation of a valid trend. 4. Watch out when pit noise becomes quiet after a trend. This usually indicates lack of interest and prices will slowly reverse or chop around. 5. Listen carefully to determine who is holding the bid or offer. Many times you will hear "paper seller", "locals selling into strength", "Goldman a buyer now", etc... Enough of these and can lead to a short term reversal. 6. Learn to filter out reliable information from noise. Floor traders play middleman to provide liquidity. They do not move price. What moves price is the other time frame buyer or seller that steps in. Recognize the difference. 7. Listen to pit noise for some time until you fully understand it. Most importantly understand the level of noise. On a scale from 1 to 10, one indicates no interest. Ten indicates extreme emotions. If you have any questions, post them here. I will be glad to answer any questions.

TA is folllowed religiously by many traders. From my experience TA works better on longer time frame charts such as the daily chart. Alot of price patterns on 1 minute and 3 minute timeframes are not as valid. TA is the study of price patterns based on human behavior. It uses crowd behavior to its advantage. Remember, TA is not 100% exact science. Trading is a game of probability. As long as you have discipline to honor your stops and ride your winners you will come out ahead. I don't rely heavily on TA for my trading. But some of the most powerful trading signals come when price patterns line up with pivot points. These setups I will take 100% of the time.

The day I took all my indicators off is the day I started trading profitably. I dont use a single indicator on my charts, not even volume. I read tape to understand volume. I use a 233 TICK chart with pivot points and market profile. Don't rely on indicators. There is good money selling indicators and will always remain popular. But like the name says... they indicate. Take a look at my chart.

Found this online. New traders may find it useful. It's a pdf file presented by FX Strategy. Has some basic trading concepts. Note: For those experienced, this is not for you. Right click and save as: CLICK HERE

I have a perfect book recommendation for you if you want to learn more about multiple timeframes and moving averages. I dont recommend it for the experienced though. Marcel Link - High Probability Trading

I don't use any moving averages for my intraday charts. I trade using a 233 tick chart mainly. However, for my daily charts I use a 9, 21, 50, 100, and 200 moving average. I dont necessarily play the crosses but use them to find cluster zones that act as support and resistance. Every trader has their own way of using moving averages. Another commong moving average for short term trading is the 8-period moving average. This is not my choice but here's a rule one trader told me a while back: "If price is above the 8-period moving average, trade from the long side and not from the short side. If price is below the 8-period moving average, trade from the short side and not from the long side." Simple trading tactic based on going with the trend. Hope this helps.

Another great quote: "There is only one thing that makes a dream impossible to achieve - the fear of failure." - The Alchemist -

It's important to understand the difference between fundamental analysis and technical analysis. A quick explanation is: fundamental analysis focuses on the company and economic events while technical analysis focuses primarily on price action and market behavior. Fundamentals include earnings report, dividends, sales, inventories, profit margins, P/E ratio, market share, etc.... Technicals include chart patterns, % change, new highs/lows, breakouts, etc... In this thread I"ll be explaining some of the important information for fundamental analysis. While the TRIN, TICK, PC ratio, prem, tape,etc... all give clues about the health of the market, fundamentals provides us information on the health of the company and its sector. Let's go over a few key data. 1. Market capitalization: number of shares outstanding x share price This data gives us an idea of the company size. Companies are classified according to its size: small-cap, mid-cap, and large-cap. 2. EPS: Net income or earnings of the company / number of shares outstanding This data shows us the profitability of a company. 3. P/E Ratio: Last trade price / earnings per share One of the most important piece of information to determine whether a company is overvalued or undervalued. Useful number to compare the P/E ratio to other companies. A high P/E ration indicates an overvalued company. A low P/E ration indicates a undervalue company. It is important to compare the company you are analyzing to different companies in the same sector. Other fundamental tools: revenue, price-to-sales, R&D, debt/equity, management effectiveness ratios, cash flow from operations, etc... When analyzing the company it is important to ask several questions: What type of business is the company in? How do they earn profits? Does the company profit in during an economic expansion or decline? These are just a few questions you need to ask yourself when analyzing a company. For example, oil companies profit when oil prices are high while airline companies struggle with high oil prices. Home building companies do well during an economic expansion because consumers will look to build new homes. During a recession, a company such as Home Depot may profit because consumers can not afford to spend money on a new home and will look for renovation instead. Identifying Market Share: industry leaders Picture the sector of the company as a pie. Whoever owns a bigger piece has a bigger market share. A smaller company will have more difficulties competing with a company that holds the majority of market share. Look to see the rank of your company within the sector. IBO or Investor's Business Daily is a good place for research market leaders and sector strength. Insider Transactions Insider buying and selling must be reported to the SEC so this information is readily available to the public. It is always good to know that the CEO of a company has just purchased shares of its company. Why? These people are in the front lines of the company and hold information that the public does not know. If for example, the president, chairman, and directors are selling a significant amount of shares this can indicate a fundamental problem in the company. However, if the selling is small do not be alarmed. They may be selling shares to purchase a new home, new car, or paying for their children's education. Generally, you would prefer to own a stock with insiders owning shares. Afterall, an insider with a large stake in his company is likely to run a company more efficiently than an insider with no stake in his company. Analyst Ratings I personally do not pay much attention to analysts ratings. Instead I prefer to do my own research. Here is a ranking of stocks: 1. Strong buy: Indicates a company that will outperform that market over the next 1-2 years. 2. Buy: Indicates a company stock prices will rise 3. Attractive: Indicates a stock in good value 4. Accumulate: Indicates an uptrending stock. Analysts recommend investors to buy on the pullbacks. 5. Market outperform: Indicates a stock that outperform the S&P 500 6. Market perform: Indicates a stock to perform similar to the S&P 500 7. Market underperform: Indicates a stock to perform less than the S&P 500 8. Hold: Analysts would not recommend adding new shares. If an investor owns shares in his portfolio an analyst recommends to hold. 9. Avoid: Analyst does not recommend adding any new shares 10. Sell: Analyst is very negative about a company and recommends a sell 11. Strong Sell: Indicates a strong fundamental problem with the company. One important thing to understand is that the analyst maintains a relationship with the company. Many analysts will not issue a sell rating because this will affect their relationship. Instead they may downgrade a stock from market outperform to market perform. Issuing a sell rating may hurt the brokerage firm and companies future business relationship. All publicly traded companies are required to submit a financial statement called the 10-Q and 10-K by the SEC. A good site for resource is 10k Wizard: SEC Filings or EDGARfilings - SEC EDGAR Filing Software and Outsourced Services. You can also request additional information at the companies investor relations department. Book Recommendation: The Intelligent Investor - Benjamin Graham Peter Lynch - Beating the Street Benjamin Graham - Security Analysis

Russia Overtakes Saudi Arabia as World’s Leading Oil Producer — OPEC http://www.mosnews.com/money/2006/08/23/russiaoil.shtml Source: Mosnews.com

Not many good books out there. But for now learn the basics of tape reding by reading Humprehy Neill or Vadym Graifer. After that stare at the tape for months. The only way you can fully understand it is to watch it carefully and practice. Learn how to seperate noise from info. Learn to watch for price rejection and short-term reversals. Also check back at the trading video forum, I will try to post a video on tape reading.

You sound like you want to succeed badly. As long as you have that motivation and passion you are on the right track. Sooner or later you will have a wake up call. That is when you realize how not to lose and you focus on starting to make money. My wake up call came after losing my account twice. One trading advice: instead of searching for the truth.... look within you. Trading style and strategy can only be mastered if you study on your own and create what fits you. Forget indicators. Who needs them? If indicators made money, everybody would be rich. Indicators are completely useless to me. My trading changed 360 degrees when I dropped all indicators off my chart and focused on price action alone combined with tape. There are two types of men. 1. Those who fall. 2. Those who fall and get back up. I wish you the best on your journey.

I disagree. By understanding the underlying financial instrument you are trading, you can understand the language of the market. I am stunned at the amount of times I can predict the market action based on market profile. You need the ability to understand the concept of price acceptance and price rejection. The market talks to you as the trading day goes. You just need to learn how to interpret it in your own language. For example: lets say the markets closed below value but during the overnight session prices were pushed back into value. The market language tells us that prices will most likely trade within or above value because there is strong buying presence below value. Once you grasp the bigger picture of market direction, then you pinpoint your entries based on that analysis. Yes... the futures markets require quick fingers. Have a trading plan and follow it. This is the only way to make money trading. Good luck streaming.

I don't neccessarily project monthly highs and lows but I do use monthly pivots for intraday trading. I also use fibs to estimate intraday ranges. Take a look at this thread.

Premium is the spread between the cash and the futures. Take a look at this thread for more info.