Being position day trader is the true art of strategy, and there are many who distrust the art, especially those who have lost countless amounts of money. To not extend this talk a lot and not bore you, first of all let’s look at some aspects of the meaning of the word auction.
- The auction always means an operational level, which results in an area of liquidity.
- The auction activity is determined by traders and their interest to trade.
The participants and their interests.
- Some traders have put fuel in the market, and have opened positions with the aim of liquidating the intraday trader.
- Some traders have opened positions in the market, but they try to stay inside for days. These traders continue to participate in the market, and have sufficient funds to defend their positions for days. They defend their positions being placed in areas where they have opened their positions and this is very important in this analysis.
- Some traders remain on the lookout for fresh opportunities, say retail traders, swing traders and neutral high-speed speculators.
In the chart you can find price levels where the auction is held and consolidated as areas of acceptance. Where price travels looking for an objective where delta initiation momentum is visible and levels where unions may notice a bearish and bullish (pivot point areas) trend. This may seem complex, but the idea is to focus in the context and not be prompted to click. When the price enters natural levels actually there is an auction there. We hope that each trader has minimal ability to understand the orders flows; we believe that we in fact should never work otherwise. We can not “take the hand of any trader” and nowhere in the world will you find a reliable trading system despite the abundance of indicators that tell the trader “buy here”, “sell here.” A trading strategy is not based on buying and selling signals, even in this or that pattern, but in the intuition of the trader for the market. It doesn’t matters if you listen to an indicator signal or not, can happen that when you do, you make a mistake and enter a spiral of mistakes and end up with big losses.
The right side of the market, usually is not the right for the big operators, who dedicate to absorb small to let them trapped in bad positions on the road. If you are a small operator better not lose sight of this perspective. If you are going to buy, you are forced to defend your position as other traders who also maintain a buy position. With this logic in your hands, everyone thinks they know, when they don’t; you can get on the right side of the market, even without realizing that it is. Our advice is to flow with the mass so it defends your position as it depends on the mass. Being small you can not work alone.
All you have to do is follow the auction and if the mass of traders put money in pressure to the demand, or orders at the BID zone, you should do as well. Of course this is easier said than done and goes a long way. And there are some aspects to consider here.
- The money is put into the depth of the order book
- The money is put directly to the market
- The money is awaiting to be slided into the market
Analyzing the above let’s consider some aspects of the institutional and professional trading firms. They do not focus their trading in graphics, but in the orders flows, hence it is so important to learn to understand the flow of orders. The order flow tells those factors causing the movement, and therefore places them on the correct side of the market, actually right side of the professional traders, not yours. Given its monetary power, these traders can predict where to open large lots of orders, and strongly protect their investments to not have net losses. Even in net losses, they can hold their positions through a monitor order flow pointing them where to intensify their attacks in order to have positive net returns.
Now we come to the point that we want to analyze. I consider that you are a retail trader, and to follow an institutional at least in their view of the market is a big mistake. Your account size can not afford to:
- Follow their advice. Since most have their printed trap, plus it is not your view of the market, it is not correct for your account size.
- Open its operations in the same place as the professional opens.
- To receive any courses of these professionals by attractive or cheap they look like. An institutional trader will not be able to operate mostly with retail accounts. It is not prepared educationally or psychologically to do so.
- Not to follow the news with optics that aims to show the news, because those news are precisely paid by those institutions to create panic in the retail trader.
So the only thing you have to do is follow the auction, and learn how to quantify the flow of orders, we emphasize. That simple action accompanied by intelligent investor patience and capacity to develop your own strategy based on market knowledge, puts you in the correct side of the market.
Perhaps this article will not teach you to recognize where to buy or sell, but for sure will open your mind to understand that if you can not develop your own trading strategy, you really do nothing in this world of trading where abound much of the best strategists minds in world. And there are items that are not to teach but to open minds closed with multiple combinations by top minds in theory and strategies.