Mult-Chart Looks as a Trade Timing Tool 3/21/13

BOT TRADING SYSTEM

Speak to any number of traders (x) and you are likely to find X number of opinions about trading.  As you gleen through all the information, you are likely to see patterns emerging that center around some Price Action Strategy.  In your quest, just remember to find what seems to work for you, and keep it simplified.  I have seen some charts that are more for an art museum than for trading.

Today's point is to look at multiple time-frame charts as a tool for trading.


LOOK 1:  3 minute, 5minute and a 1point bar chart


The pre-open for the U.S. today was decidedly bearish in tone.  Thus my approach was to wait for a pullback, if the bull was to be revived, or wait for an opportunity to take a lower-risk short that would be with the dominant trend.

All three charts were showing a resistance level near the 20 and 50 EMA's.  The 5 minute was stalling near the price turn in the pre-open where price moved away from the 20EMA.

Any entry you take can fail.  The trader's job is to identify where price is likely to do what your trade is designed to do.  There should be some compelling reason (or reasons) to enter what your judgement is regarding as a lower risk trade that is likely to produce favorable results.

The trade was entered with a belief that price would, at a minimum, retest the prior lows.


LOOK 2:  setting targets

Setting targets and stops are a personal choice.  My preference is to take a winning trade that has price moving beyond my target.  No "here is the top, or the bottom".  Just play the action and leave biased opinions on the side.  In this case, they were set at support/resistance levels.

The trading range dictates; not random BS.  The market could care less about what you think.  Plays are from reading what is happening and what is the likely near-term results; not wild speculation ( example: "market is moving to 1520!").  There is a huge difference.

LOOK 3:















When a trade is over, look, read, make new interpretations.  Yes the trend line failed, yes price hit resistance, and yes it hit our target.  BUT.....

The higher lows seem to suggest a pullback, not a trend continuation for the bear.

Look, read, enjoy your day trading....