Rally base drop, drop base rally, support and resistance, Fibonacci, Elliot Wave, and so much more… There are thousands of different theories used to try and figure out where price will turn in a market, and where it will go. What makes Online Trading Academy different is that we don’t subscribe to anything related to conventional technical or fundamental analysis. Our trading lessons are focused on something totally different for a reason. We ignore conventional analysis theories simply because they are very flawed and why not go straight to the truth?
Truth is, market prices move because of an ongoing, very qualifiable supply and demand equation. Price movement occurs when this simple and straight forward relationship is out of balance. This supply and demand imbalance is what our trading lessons are based upon. To explain, let’s look at a recent trade in the NASDAQ that is also a page right out of our new Core Strategy Course, to help share the picture that represents real supply (or demand) in a market.
Recent NASDAQ Day Trade
Notice the pattern, Rally – Base – Drop. This is the picture of supply that helps you be a willing seller high up on the supply and demand curve. With any picture of supply, you need to make sure it is very “fresh” meaning there are still significant unfilled sell orders in that area (price level). The short entry once the picture above is produced is to short a rally back up to that supply level like I did in the trade above. The initial “drop” from the level tells us supply exceeds demand in that area. We sell short at the proximal line with a protective buy stop just above the distal line and that’s the sell setup.
Keep in mind that a key trading lesson in the course deals with the ever important “Odds Enhancers” which are the filters that helps us identify the best levels with the strongest supply and demand imbalance. Make sure you understand those before trying this at home. Going through this simple checklist helps us identify where banks are buying and selling in markets so we can buy and sell there too.
One of the most important trading lessons you can learn is that this is not about taking many trades in a day or session, it’s about taking the low risk, high reward and high probability ones that meet our simple criteria. There is nothing fancy about this, no indicators or oscillators or conventional chart patterns. There are not many different strategies, there is simply one that we have patented. Buy where banks and financial institutions are buying and sell where they are selling. Another way to say that is, buy where the smart money is buying and sell where the smart money is selling. The purpose of this article was to help you identify what the picture of that looks like on a chart. Of course, the Odds Enhancers help this process immensely and are key to identifying the key levels.
Hope that was helpful, have a great day.