Day Trading what you can’t see. Rolling with the changes…

Sometimes a bit of lateral thinking needs to be applied to day trading. Most traders want to see something happen before making a decision. The average day trader wants to see a ‘signal’ or a trigger to take a trade. This is fine but sometimes it’s the fact that something ISN’T happening that tells us it’s a good time to get into or stay in a trade. This is especially true when a market slows down or is in a range (as it is right now). In fact, some of the best signals in day trading are when one side of the market stops engaging. It’s a better signal because it’s more subtle, so you have less predatory trading around that area.  Day trading is trickier in areas where a lot of people are engaging because of this predatory behavior that nudges the market around to shake day traders out of their position.

Day Trading Tips

In the video at the foot of this post, the markets had slowed down considerably. We are 70,000 contracts below the average for the time of day day. It’s not long after the open and we’ve tested the prior days Value Low once and now we are going down to it again. We can see the DOW is at it’s lows and the NASDAQ going towards it’s highs, the NYSE TICK hasn’t put in any extremes.  so we are definitely looking for a range trade. We can see the volume profile is “D” shaped and so we are looking at the extremes as potential entry points.

It is significant that there wasn’t a lot of trading right from the open. That means it’s likely there’s not a lot of institutional activity which tends to start at the open. So of course, our day trading has to adjust for that.

In more normal market conditions, we might expect to see momentum come in on our side after entry. The trouble is when a market has slowed down to this extent, we rarely see that. What we see is more of a lazy grind up to the opposite end of the range.

So if you want to stick with the same market through this period, then you’ll have to look for different things in the order flow. Or in some cases, for the lack of things.

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Jigsaw Trading
After suffering a 30% drawdown at the hands of “independent financial advisors”, Peter started trading in the early 2000’s, figuring there was no point in paying people to lose money for him. By 2005, Peter was day trading NASDAQ stocks and later discovered the value order flow. He struggled with the way order flow data was presented so designed tools that organized Order Flow information more rationally and Jigsaw Trading was born. Those tools are now the #1 ranked software on Investimonials.com.
Today Peter spends his time trading and helping other traders through the Jigsaw community, articles and free one on one sessions.
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Jigsaw Trading

Jigsaw Trading

After suffering a 30% drawdown at the hands of “independent financial advisors”, Peter started trading in the early 2000’s, figuring there was no point in paying people to lose money for him. By 2005, Peter was day trading NASDAQ stocks and later discovered the value order flow. He struggled with the way order flow data was presented so designed tools that organized Order Flow information more rationally and Jigsaw Trading was born. Those tools are now the #1 ranked software on Investimonials.com. Today Peter spends his time trading and helping other traders through the Jigsaw community, articles and free one on one sessions.

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