Friday, May 8, 2009

Market Logic

Hi guys,
I wanted to get into some of the subtlety that needs to go into determining whether or not to take a trade. The example above lets us look at a trade I considered taking but passed on and one that I took. Even though I have shown you many patterns that I look for, it takes far more than trading patterns that determines our success as a trader.

It is imperative that we gain an understanding of market behavior and that we make ongoing evaluations of what we believe is likely to occur. We won't always be right. But, over time, we become more and more adept at reading the market.

My entries vary a great deal. If we wait for more footprint confirmation, we often give up trade location. Sometimes, I indeed want to see more confirmation than on this trade. But, in this situation, I had clear reasons for being more aggressive.

I hope it helps,



  1. Nice one. I was on vacation Friday but I sim traded it this morning. I did go short at 24.5 there and scratched it after sitting forever. I did not however take the short at Thursday High. I felt the volume at 925 was more significant and the time spent there warranted a move higher. Was wrong, clearly.

  2. Brian,
    Its definitely fun when we're right.I definitely thought strongly about taking it at 24.50. I decided, however,that the high was too important and would be tested.It was the prior day,5 day,20day and 60 day high. It was also IOAMT's Average Range High for the day.

    I really like your comments. Makes this whole blog thing way more interesting. Thanks so much for contributing.


  3. My pleasure MG. I have a 2yr old and therefore little time to fiddle around with the charts like you do, trying new things...which I would normally love to I live through you for that....

    On a different note. Do you ever have losing trades? Would love to see a post where you showed how you dealt with a trade gone wrong... Also would love to see a post about your trade mgmt. Stops and profit targets etc... That is something we have had to develop on our own as not really Billy's thing...