The Alarm Just Went Off

The markets appear to have woken from their slumber

After a few days of basically flat lining, we have some good movement today finally in many places. I do warn people to watch for the one day wonder moves that often surround holidays especially in the currencies. If you are in something and get one big day in your direction on a holiday electronic session or the day after, take the money. I have been burned on this scenario way too many times in the last year. We tend to get false moves on light volume which have been reversed the following day with a very high probability lately. I have had several big one day moves become scratch trades around holidays, don't let it happen to you.

Let's check out how the Dollar looks, I have been wanting to buy a pullback here. First and most importantly, we have a flat lining buy setup shown in the first panel where I have a label of strong uptrend. In these situations when the %R dips into the buy zone, we need to be buyers. It has reached that zone today so far. If we close here, this is a buy signal for tommorrow. Remember, it has to close there, trading intraday in a %R zone means nothing.

Next on the third graph, we can also see the longer term of the two trend oscillators also showing a pullback in an uptrend situation. Of course you could tell that just by looking at the chart, you do not need a fancy oscillator to tell you that. You often see these same oscillators on charts from me. There is no magic to them, the magic is in just appying one approach consistently. I use these over and over and most of my trades look pretty similar. This is not a coincidence. I have things that have an edge in trading, so I just apply them over and over and wait ( although at times impatiently ) for the same setups to show up. I would suggest you do the same. Find an approach you are comfortable with. Learn it's limitations, embrace them, accept them.

Not matter what your approach is some of the trades will lose, deal with it. As long as what you are doing is based on sound fundamental concepts, and has demonstrated that over a large sample size an advantage in the marketplace, then just go with it. Use it over and over. Do not get discouraged by the losses. It is known going in there will be some. Last month I started off gangbusters, then hit a stretch of a few losses that took back about 35% of my gain. I did not get discouraged. I waited for the next group of setups to show up. When they did I placed the orders and had a homerun month. I did not get discouraged by a few losses mid month. I know my approach has an edge, so I just waited for the next setups to develop and applied my techniques when they did.

Too many people, myself included in my early days, constantly chase the holy grail in trading. I have news for you, there is not one. You will do yourself way more harm shifting from one approach to another looking for that perfect technique, than you would from even taking a marginal approach and perfecting it. To be clear some searching needs to be done to arrive at your ultimate technique. You need to match your personality to your approach or you will fail. However, once you have done that, stay with it through thick and thin.

I promise you that you will have both, the thick and the thin!