Sunday

A trading business is a service provider

Each morning in the live trading room, we highlight areas where participants are unlikely to agree on price based on the auction results of previous days, weeks and months.


Click on the image to enlarge

We do this because if price moves into these areas, traders wanting to exit their positions will find it difficult to do so at the price they want due to minimal liquidity. This leads to directional movement.
Take a look at the trade below from Friday morning…


Notice where price dropped sharply through prices participants couldn’t agree upon in previous days?

If I’m holding opposing positions prior to this occurring, I provide a service (liquidity) to the market, filling orders from traders wanting to exit.

As a necessary service to the markets, this is how a directional trader prospers.
Traders who can’t define their trading actions as a service don’t prosper.