What the hell, have a look at this to get you started. This is how I trade.
Not all the time, this is just an example of a number of factors coming together to shift the odds in my favour.
I took this trade yesterday and it's about as simple and as easy a trade as you're ever likely to see.
This is NQ (Nasdaq futures contract) - or rather, a spread betting company's version, but this one is fine in my opinion. You pay a spread obviously, but I haven't seen any funny business.
OK, first thing, the daily trend is up. You can't see it, but it is. Not that it makes much difference on a 5 minute chart, but it's nice to have the wind at your back.
Look at the long white candle marked with the green arrow. See where it is, sitting on top of a nice big round number? These numbers are important, believe it or not, and I like to trade away from them.
Now see how the number (2300) was holding price down (resistance), but price eventually popped through it? Why was it holding price down? Because people were selling when it got near it. How did price make it through? Because for some reason buying became stronger. We KNOW that there must have been buying there, otherwise price could not have gone higher.
Now price goes through, and starts drifting down to the old (broken) resistance? There was buying there - what if there still is? Price is going to rise again. So the old resistance becomes new support (sometimes called a pivot zone). At a round number. There's a floor trader pivot there as well (google it). This is the kind of area I want to trade at.
Now look at that whole massive range of little candles, doing nothing. Then see our trigger candle. It's huge. It takes out the whole range, testing below (only slightly, but still) and breaking above. Look how it closes - right at the top. It closes above the range. It's strong.
I add a thin buffer and half the spread to the high of the candle and buy when it breaks. My stop goes where the market tells me I was wrong - in this case below the low of the candle, which is also below the range, below the round number, below the pivot, below support. If price goes through that lot, I do not want to be long, so that's where my stop goes to start with.
You trail up reducing your risk sensibly. After a bit you move your stop to breakeven. This market often trends really well during the day, so I just leave it there. Close out towards the end of the day.
I doubt many people could show you a cleaner, easier, simpler trade this year.
Now, you wait patiently for trades like this (by which I mean that are this clear, this obvious, not that necessarily look like this). Watching 4 or 5 markets, you might get a couple or 3 a week, looking at say 5 and 15 minute charts. The hit rate is incredibly high, unless you decide to f*** up on purpose and don't wait for the
really obvious ones like this. Then you'll go back and forth, making a bit, losing a bit.
If you wait, take these when they come, build your account, and don't p1ss your profits away on third rate trades, you'll make a lot of money.
All I'm doing here is using support and resistance and a price action trigger. I've drawn one line on my chart.
If you want to ask anything, go ahead. You and others might think it's a load of rubbish - fair enough if so. But whatever you do, you must learn for yourself, you must develop your own skills. Nobody can teach you how to trade.
By the way, nobody's perfect. I didn't quite hang on until the perfect exit point, I closed a little earlier. In fairness, I can't predict the future, so I didn't know that the perfect exit was coming along yesterday. Still I caught most of the move.
