As any trader will tell you, the last couple days in Emini S&P 500 futures have been slow to say the least. Things sure can shift quickly though as today's price action really opened up to provide traders with an absolutely incredible day! This is the ebb and flow of markets and something we need to be prepared for as day traders. Not every day will be hugely profitable, and sometimes there will be losing days too. The key to making it in the trading game is realizing this and continuing to follow your plan when times are tough because there are always better days on the horizon. A veteran trader will find their losing days very few and far between, but they only get to that point by developing their skills and sticking to their trading plan.
The market was absolutely flying today and for the first time in a couple of weeks we were really able to open up our profit targets and start looking for more from the moves. When it comes to development as a trader, usually the final piece of the puzzle is knowing when to expand our potential profit targets to maximize our results. To do this we need to keep a close eye on the greater market forces and adapt to them appropriately. If the market is showing little strength within a range then it doesn't make much sense to start looking for big winners, but when price starts to move freely it's important that we take notice.
When price is moving aggressively it makes sense to trade aggressively too.
The Trading Recap - Video
I decided to make a video for today's recap simply because there was so much price movement and so many trades. As you will see, I mostly traded without bias and simply allowed the price action, momentum, and market structure to get me in and out of trades. This meant taking some losses on the market turns as price retraced to the upside at times, but overall I was able to keep trading with the overall flows and profited handsomely from it.
There's multiple reasons so many traders struggle with trading trends, some psychological and some purely mechanical. From the psychological side, many traders simply find it hard to accept that long term trends might continue even when they are already very extended. When price is trading into empty "space" on our chart (aka trending into new ground) there is always that fear that at any moment the trend might end and turn the other way. While this is certainly a possibility, ultimately the trend usually wins out and traders who think this way either get caught in the wrong side of the market or they miss a number of excellent trades as the trend resumes. We keep things simple here at STA so that we never miss out on an excellent trending move.
Most traders out there also tend to rely too much on indicators which in the long run is often detrimental to their results. While indicators have their place and can make our job as traders easier, if we use them as a crutch to make our decisions instead of adapting to market conditions then they are almost certain to hurt us by keeping us out of some very good trades. Using indicators to help us quickly assess the market and add evidence for our decision making process is fine, but they aren't meant to accurately reflect the market a whole.
In order to read the market with precision and trade at a high level it's crucial that we understand the mechanics of market movement. This allow us to recognize the strength and momentum of the market, which removes our reliance on indicators and gives us the flexibility to maximize profits on a day like today .
Learning to read price action and market momentum are the key trading skills we look to cultivate at Samurai Trading Academy.