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High Probability trading Traders need the best time to
enter a trade means knowing where the real buyers and sellers are in a
market. When you are buying where the major buy orders are in a
market, that means you are buying from someone who is selling where
the major buy orders are in the market and that is a very novice
mistake. When you trade with a new trader, the odds are stacked in
your favor.
The fear of losing makes a new trader watch the losing trade go down
instead of stopping out because they think the trade will actually
make them money which is desperate thinking. The same is true with a
winning trade instead of taking there profits they stay in the trade
to long from greed and do not get out in time before the trade goes
south.
Learning to trade the futures markets is something you need to do
before you ever try and start trading futures. Futures trading takes a
great deal of knowledge on how the markets work. Here are some
pointers on how to get started in trading futures contracts.
The first thing you need to do is read and study all you can on
trading futures. You can visit the library or go online to read about
futures trading. You also need to find a futures broker that will help
you learn trading and what to expect. Most top futures brokers will
help you set up an account and will have an introducing broker help
you with your account. Take the time and visit CME Group (CME)
cmegroup , and the Chicago Board Options Exchange: cboe which is
about options trading. These web sites have great education and
plenty of home study materials and futures trading education that you
can read.
Option brokers and a few other brokers are very good at futures
trading. Make sure to talk to them about margin requirements and how
much money you need to deposit to open your futures trading account.
Ask them if they allow 24 hour trading and if their charts are free.
You should try their practice accounts first and paper trade before
you start using real money. You need to learn to use protectective
stop losses especially if you leave trades overnight because of
overnight gaps. You can also sign up for different news services some
are free and others you will have to pay a fee. Check and see if your
broker offers news releases on future contracts.
Talk to them about their commissions and if you get a discount
for making a certain amount of trades. Make sure to read the brokers
commission rates and compare them to other futures brokers. All
brokers will make trades for you but the rates will go up so its
better to learn yourself and make your own trades. Next you need to
learn how to use the charts, take your time this is where you can lose
all your money if you don't understand the system. Start out watching
the S&P futures, S&P Mini or one of the other major futures exchanges
on your charts.
So how do we time the markets turning points in advance? It
all begins and ends with understanding how to properly quantify real
supply and demand in any and all markets. Once you can do that, you
are able to identify where supply and demand is most out of balance
and this is where price turns. Once price changes direction, where
will it move to? Price moves to and from the significant buy demand
and sell supply orders in a market. So, again, once you know how to
quantify and identify real supply and demand in a market,
You can time the markets turning points in advance, with a high degree of
accuracy.
It all comes down to supply and demand, just like buying and selling
anything else in life.
While traders had to adjust their focus to a choppy, highly volatile
market, they still had great opportunities to profit that should
continue into 2012. Just remember to reduce your risk when the markets
become more dangerous. You can do this by reducing the number of
trades you take, the duration of the trade or even the share size. By
balancing those three factors, we can trade and profit while
protecting ourselves from large losses.
This year will also find investors and traders alike, slow to
respond to the shifts in the market's direction. That's because many
traders are stricken with what psychologists refer to as "confirmation
bias." This is the natural tendency for people to seek out information
that will affirm their beliefs, or in the case of trading, data that
will validate the decision to buy or sell a security. This thought
process is taken one step further as like minded individuals are
sought after throughout chat rooms and the internet as a way to feel
comfort in the fact that many other people have made a similar trade.
The worst part of this bias is that when adverse information is presented,
it is usually dismissed as spurious and ignored. This condition is
very prevalent in the realm of financial speculation. And, it can be
directly attributable to the systematic destruction of many brokerage
accounts by individuals plagued with this most common of human
shortcomings. Be proactive in ways that will keep you poised to deal
with challenges and preemptive as you anticipate what can go wrong and
avert the issue whenever possible. As you grow in knowledge and skill,
be sure to practice the tools and techniques that you have learned,
early and often, in order to take control of your development as a
trader and as a human being.
A major advantage is the elimination of emotional and
psychological influences determining what and when to trade in favor
of a cold, logical approach to the market. Automated software makes
your trading decisions unemotionally and consistently, using the
trading parameters you've pre-established or the default settings
you've pre-installed. Beginner and even experienced traders may
sometimes make a trade based on some emotional or psychological
trigger that defies the logic of market conditions. With automated
trading, such as learning a good system lapses of judgment just don't
occur. Whatever your level of expertise in trading beginner,
experienced or veteran or even if you're only considering entering
this potentially profitable, fast-moving global market, automation
software can help you be successful. There are also potential dangers,
of course, when trading in any market. But automation software may
help you sidestep the worst of them. Make sure to know how to set stop
losses and let your winners run.
The SPX saw significant volatility in 2011, but finished the year
within one point of its 2010 close. True to historical seasonal
influences, the market topped in May and bottomed in October in
dramatic fashion. We believe the frustrating price action is
characteristic of a weak market and would prepare for another down leg
in the first quarter of 2012.
The 200-day moving average has rolled over for the SPX, which suggests
rallies are counter-trend moves. Looking at the picture of US Dollar
index which is inversely correlated to the U.S. Stock Market , we can
see that it has a much bigger distance to rally before it runs into
supply.
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