Oh My Gosh, the Price Moved

I get a lot of emails, and some comments too, asking questions about "how did I know" or "why...".

Guys, you are trading in a vacuum. Context and envisioning is everything. There is now a huge advantage in being an electronic local or day trader instead of trading from the floor. You get all this information in picture form so you can imagine what can be happening. You can see the bias and the possibilities of the market. You can see that if this happens then that is likely to happen. Then, when price moves and order flow in the form of the VB and CVD shows itself and the range bars do something and if you have MarketDelta and see what is happening with volume at each tick inside the range bar, you make a deduction. If momentum is picking up and you are leaning on support then you can pull the trigger.

The interplay between the two CCIs and the relationship between the two EMAs give an enormous amount of information. The way to learn their language is to look at charts. Look at moves in hindsight and see what commonality exists. Once you see the commonality you can create a setup and backtest it, fine tuning as required. You then "own" the setup and believe.

I have been watching the winter olympics and the one thing in common that all the athletes who are successful have, is they believe. They have worked out their setups, practiced them and then just put it all into practice. The same as in trading.

I have taught Kiki that she can't just sit there until something happens and then decide what to do. You are part of the market and must be part of it completely, thinking and working out what is going on. At the end of my trading day, I'm exhausted. It's not because of laziness that I stop trading by RTH lunchtime. It's because I can't function at the level I need to for any longer.

Here are today's morning trades in the DowEuro50. I traded the ES in the afternoon but have run out of puff so no afternoon charts.

Each Trade is 3 Contracts		Exit Types
Date	19-Feb-10
Trade #	Points W/L
Trade 1	9.00	Reversal
Trade 2	39.00	3 scales
Trade 3	55.00	3 scales
Trade 4
Trade 5
Trade 6
Trade 7
TOTAL	103.00	1030.00 Euro