Sunday

Trades from the Live Trading Room: 25–28 September

Four day week due to a public holiday Friday however over the four days, there were numerous trade opportunities which allowed for tight risk permitting sizing up of trades. Overall, another profitable week in the room.

Go to the Live Trading Room for access details

Click on images to enlarge...

20180928 Thursday

Wednesday

Intraday trading: what it looks like

The chart below reiterates the main aspects of intraday trading:
  1. I lose pretty much as often as I win
  2. Some of my trades deviate from my own rules, self discipline is a constant work in progress
  3. I keep my losses tight and where I can, look to make a little more on the winners

Blue triangles facing east = initiate long
Blue triangles facing west = cover long
Fuchsia triangles facing east = initiate short
Fuchsia triangles facing west = cover short

Click on chart to enlarge

Saturday

Common Trap

Observing the image below, it would be easy to enter short based on:
1. Overall direction is down
2. New buyers have entered the market who will need to cover if price rolls over
3. Evidence buyers can no longer push price higher at prices where sellers previously took control

Click on image to enlarge

Wednesday

Role of the Trader: taking the other side of emotion fuelled price movement

As a discretionary intraday trader, my role is to provide liquidity to traders on the wrong side of emotion fuelled price movement.
To understand this further, a legitimate knowledge of how markets operate is needed.

Market Mechanics:
  1. The market is an ongoing auction facilitating price agreement between buyers and sellers.
  2. At any specific moment in time, there is a fixed number of buyers and sellers.
  3. Movement in price engages auction participants, momentarily creating imbalances in supply and demand.
  4. Auction continuity is maintained by recycling traders. Forced out of their positions, traders rejoin the auction creating the fuel necessary to ensure continual ticking-over of prices.

Summary
Traders on the wrong side of price movement find themselves competing for queue position as price moves rapidly to absorb the influx of exit orders. It is during these moments that as a trader, I can serve trapped traders by providing them liquidity.

Friday

Shorts in the AUD against direction, why?

As per the composite profile for the current AUD range (first chart below), notice how buyers and sellers lose interest significantly above this level?
Notice how we have a similar scenario in the daily profiles as per the second chart?
And notice further evidence in the second chart to warrant a short trade?
The best trades are when you can align several ducks in a row. Five ducks lined up simultaneously for a short trade this morning.
Click on image to enlarge

Tuesday

AUD Today Part 2: Trade Overview

In line with the previous post plan, partial profits were taken at yesterday’s high agreement area.
Price then had a sharp and fast sell off, and:
  1. The speed of the move used up all available sellers at that specific moment in time
  2. The speed of the move enticed “price chasers” to enter because many traders fall for the counter intuitive nature of markets, relating fast movement to price continuation. However, fast movement uses up available fuel in the short term