Post by traderAllen on Jan 9, 2016 11:11:04 GMT -5
I like to read and/or study just about everything out there on trading. I do this because trading is my passion it is what I enjoy doing.
I was reading a copy of the book titled"birdwatching in line country'" where the author made a point that I thought was dead on although he put it in different words so I'll take the time here to put it in my words. The question is of course how do we define a trend? Well that could be broke down very simply. A trend is price movement over time in a single direction. You're probably saying to your self"what's new we all know that"? Well it has to do with scalping, as a scalper we trade intraday. Intraday you cannot have a trend because you don't have enough time. Therefore intraday price movements by definition can never trend. This is very important for you to understand. Intraday you can only have price movements. Meaning you need to be able to understand and see buying pressure and selling pressure. That is our moneymaker is a scalper. It is totally different than trying to trade a trend. All the great pit traders had one thing in common "noise" they can see and hear the action going on in the pits they can see and hear traders buying or selling and that gave them a big advantage.
Many of those traders lost their ass when they had to start trading from an office off the floor. They were not able to "visualize". which is what we have to do now. the buying and selling pressure. When you sit down at your trade desk, you need to watch the chart, you need to understand how others trade. Think about them, the hedge funds, the Fibonacci traders, the Elliott wave traders, your fellow scalpers. What are they doing at the moment? how would they be trading the particular market? And you watch for clues as to whether or not they are buying and selling. Once you recognize a market is being bought up and or sold off. Only then do you start looking for a proper set up that puts us in line with the pressure. This is how a scalper makes money, they place their orders ahead of the rest and let other traders push their trade to profit.
I was reading a copy of the book titled"birdwatching in line country'" where the author made a point that I thought was dead on although he put it in different words so I'll take the time here to put it in my words. The question is of course how do we define a trend? Well that could be broke down very simply. A trend is price movement over time in a single direction. You're probably saying to your self"what's new we all know that"? Well it has to do with scalping, as a scalper we trade intraday. Intraday you cannot have a trend because you don't have enough time. Therefore intraday price movements by definition can never trend. This is very important for you to understand. Intraday you can only have price movements. Meaning you need to be able to understand and see buying pressure and selling pressure. That is our moneymaker is a scalper. It is totally different than trying to trade a trend. All the great pit traders had one thing in common "noise" they can see and hear the action going on in the pits they can see and hear traders buying or selling and that gave them a big advantage.
Many of those traders lost their ass when they had to start trading from an office off the floor. They were not able to "visualize". which is what we have to do now. the buying and selling pressure. When you sit down at your trade desk, you need to watch the chart, you need to understand how others trade. Think about them, the hedge funds, the Fibonacci traders, the Elliott wave traders, your fellow scalpers. What are they doing at the moment? how would they be trading the particular market? And you watch for clues as to whether or not they are buying and selling. Once you recognize a market is being bought up and or sold off. Only then do you start looking for a proper set up that puts us in line with the pressure. This is how a scalper makes money, they place their orders ahead of the rest and let other traders push their trade to profit.