Would you?

8/9/2010

In this post we will look at how we confirm the scalper trades. We always want to only scalp in the bigger direction and skip the counter trend trades. We still must know how to trade the counter trend trades so we know how the charts look but we want to skip those trades. In doing this we are building discipline and over time if you can master your discipline you will build confidence but it will take time.

Would you go short when our bars are green?

Notice the 3 minute chart went from a contracting state to an expansion state two times on this chart and both times we had yellow bars telling is the expansion was about to start. Our bigger outlook is up and we go over this with every member every night with our member videos. We show why we have the outlook we have and why.

Both of the expansions we in the direction of our bigger outlook and this is where you should take advantage of the situation and make it worth the risk you are taking. Are you trading the same amount of contracts on every trade? With the trend or counter trend?

First it is learning how to know the bigger pattern because the bigger pattern tells us the trend. There are steps to the process and without knowing the steps how will you know the questions to ask yourself in real-time? In trading it is you constantly asking yourself questions and then finding the solution based on the odds and the charts are what give us the odds. There are bigger , medium and short term odds to understand and use on every trade.

You can enter on the 3 minute chart but sometimes the 3 minute chart will not give us the best entry signal and this is why we also use the scalper charts for entries. This way we can still participate even if there is not a perfect 3 minute signal. Like with today we had a contraction early and then the yellow bars and then a breakout so if you missed the best entry on the 3 minute you when then look to the scalper for a entry and then obey the scalper rules.

The blue bars did a god job of telling us that the high was in for the day and that the move from the yellow bars was most likely over and to not look to re-enter long even though the trend was still up. When day trading it is about taking some out of the middle of the move.

Would you stay long when the blue bars appeared?

Would you go short when our bars are green?

Would this help you understand the direction of the market?

How can you know if a indicator is worth using? Make it a paint bar study and if the bars are red and the price is going up then get rid of that indicator!

All indicators are tools but most will confuse you more than help you or scare you out of trades that should be taken.

In both of the expansions on this chart most all indicators were pegged at the top saying that the market was actually overbought. Put a fast stochastic on your chart and you will see what we are talking about. This might scare you out of the trade or worse you might actually take it short!

If something is not working stop using it and find something that does. This might sound very basic but most traders still have up the indicators that have no value because "this time" they might work and that is not good enough. If we had a choice to have 3 standard indicators or no indicators we would choose no indicators. At least this way we are only trading the patterns without adding in confusion to the patterns.

Happy Trading,

www.eMiniSchool.com