What Information Matters When Making a Trade?

2017-05-18_9-17-25
If this is how much research you need for your 5m trade… we have problems…

So I have been observing the trading community around me lately and I wanted to write a brief comment on the use of information in trading. News events. Correlations. Big picture ideas.

What is all of that useful for?

If you say it’s valuable for day trades that involve the movement of 1 or 2 sessions I would like you to put this blog down right now. Go look in the mirror. Now ask yourself what good any given economic report or Donald Trump tweet will give you on a 5m chart to help you keep your risk small?

Ponder for a moment… Silently. I’ll wait.

Ok we good now?

Sweet.

None of that means a dang thing for your intra-day trades. If you are a pure swing trader, fine. Pay attention to big events and big ideas. But again, manage your risk ON YOUR CHART. Don’t get involved in an “idea trade” and end up thinking your the Oracle of Omaha when you might actually be the Oracle of Oh..myaccountjustmargincalled.

Big news develops opinions, opinions develop positions, and positions develop stress. Being present in this moment is very difficult for trader SLAMMED daily with ideas and news and opinions. I have seen so many times how ideas ruin trading.

So what matters if you want to trade on a daily basis?

It goes back to something I said a long time ago in a different life. “This is not your business or your business model. YOU MUST DO WHAT THEY DO”.

Learning to follow the price action on a lower time frame chart takes so much time. It’s like tape reading in stocks I think. I listened to Mike Bellafiore talk about take reading and realized that learning 5m price action in FX is something like that. (I can’t wait to get the emails about that idea…)

So learning what price is doing RIGHT NOW. This moment. Being a day trader myself, I rarely even pay attention to the previous day’s action. I see price for what it is doing today and right now inside of the context I have developed. That’s it.

All of the problems with my trading I have tried to talk openly about actually been a blessing in disguise. It’s forced me to own it more and not cheapen the work. I have had to focus and make progress on my ability to read price and the discipline to do what I know is right, not what I feel like doing.

So I just want to encourage someone today that you have to decide what you want to do. swing trades require one mindset and information set, while trading day requires a completely different one.

Pick your trick. Then focus on it.

Have a great day.

TradingLife:DayOrSwing

 

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