Thursday, 27 May 2010

Over, Under, Sideways, Down

The Yardbirds said it years ago.

It's all very well to have a view of what is happening but there is really only one trend and that is the trend of the chart you are trading.

In Market Profile terminology, the short term time frame trader usually trades with the long term time frame trader. And they both can make money. Although we are in a zero sum game, traders with opposite views can both make profits if their time frames are different. This is a critical thing to understand as a trader. We have to know our business. What are we? What is our time frame? It does not really matter as long as we know what it is and consistently work at it.

One of the things that some people try and track is what the big guys are doing. Well, I only really want to know what the big guys are doing who are involved in my time frame. Yes, there are areas where we will overlap but the very short term and the very long term will overlap rarely. While a 2000 lot trade may have an instant impact, it will need a lot of them to impact a market that trades over 2 million contracts a day.

I have striven  to make it more simple as I have evolved as a trader. Simple setups, simple ideas. Making it complicated means I can miss something and I can make a lot of mistakes. Looking at a few simple things inside the structure I have created for myself, I see the order flow I need to see. With the speed of markets, I just don't have time to do anything complicated.

However this current crisis unfolds, from a moment to moment trading scene, it doesn't interest me except in that it has brought back a lot of volatility which is opportunity.

Bread and butter day today trading the ES. At the time of writing, we were getting higher value, but the day is not over yet. The extra bit at the bottom of the chart is the Delta Momentum I'm testing. Not too different to VB but maybe a little more info sometimes. I'll see.


  1. Tom, could you tell, please where was your stop for the outside in-tradesnr 8 and 9. Above swing highs? And why you haven't entered same trades near the nr.2 trade and later in 30 min? Thanks!

  2. My drop dead stops are far away. I use the market to tell me when to exit.

  3. Also it would be interesting to know how do Kiki is performing? Is she succesful, have she moved to 2 contracts or still trading 1 contract? It would be nice to know how much ticks per month she makes now. Please, get some score to her trading, Tom. Is your main plan realized?