Brandon Wendell, CMT
Brandon Wendell
From time to time I discuss more advanced trading tactics and even technical indicators that I feel may enhance a newer trader’s ability to read price. However, you must realize that these techniques are designed to help you with identifying the price levels for trading. They are not to be your sole decision making process.
We need to keep our trading as simple as possible. Focus our decisions on when to buy or sell based on Online Trading Academy’s Core Strategy involving trend with supply and demand. That is the core strategy that we base our trading on and what we teach in our Professional Trader course. When we are sitting down to find trades, the first thing we need to do is to identify the trend we are trading in and even the trend of the larger timeframe. The trend will tell us whether we will have greater probability taking longs or shorts in our trading.
Once we discover the probable direction, we then need to identify the best entry and exit zones. I equate trading to riding a train. You first find a train moving in the direction you want, (the trend), and then board at a station (supply & demand zones). Trying to board the train between stations while it is in full motion is extremely risky just as it is financially risky to jump into a trend when it is not at a supply or a demand level.
We buy at demand and sell at supply for several reasons:
It is the area where we expect prices to resume a fast movement after a pause in the trend. If we are wrong, then we will have very small risk as our stops will be in a logical place that is very close to our entry.
By entering near the beginning of an impulse, (the dominant move in the trend after a correction), we are going to have greater profits than if we jumped in later as the trend was already moving.
If we buy or sell with the trend and in those supply or demand zones, we will have a higher probability of the trade working out.
When we trade, we want high profit potential, low risk, and high probability for our trades. This is a key to success. So how do the advanced techniques fit into our trading? They give us another perspective of price and can increase our confidence in taking a trade. You have to use those indicators properly though. Buy and sell signals in the indicators will always happen after we are moving away from the supply or demand levels so they are late. Divergence between an indicator and the price of your security or the indicator sitting in an overbought or oversold zone when we are hitting a supply or demand zone is an odds enhancer for your trade.
Trading is rules-based and needs to be as emotionless as possible. If you are unsure of the rules or how to identify the trend, supply or demand, then visit your local Online Trading Academy center and take a course. Proper education is the best way to protect your capital and grow your money consistently.
Neither Freedom Management Partners nor any of its personnel are registered broker-dealers or investment advisers. I will mention that I consider certain securities or positions to be good candidates for the types of strategies we are discussing or illustrating. Because I consider the securities or positions appropriate to the discussion or for illustration purposes does not mean that I am telling you to trade the strategies or securities. Keep in mind that we are not providing you with recommendations or personalized advice about your trading activities. The information we are providing is not tailored to any individual. Any mention of a particular security is not a recommendation to buy, sell, or hold that or any other security or a suggestion that it is suitable for any specific person. Keep in mind that all trading involves a risk of loss, and this will always be the situation, regardless of whether we are discussing strategies that are intended to limit risk. Also, Freedom Management Partners’ personnel are not subject to trading restrictions. I and others at Freedom Management Partners could have a position in a security or initiate a position in a security at any time.
Editors’ Picks
EUR/USD holds firm near 1.1850 amid USD weakness
EUR/USD remains strongly bid around 1.1850 in European trading on Monday. The USD/JPY slide-led broad US Dollar weakness helps the pair build on Friday's recovery ahead of the Eurozone Sentix Investor Confidence data for February.
GBP/USD holds medium-term bullish bias above 1.3600
The GBP/USD pair trades on a softer note around 1.3605 during the early European session on Monday. Growing expectation of the Bank of England’s interest-rate cut weighs on the Pound Sterling against the Greenback.
USD/JPY keeps the red below 157.00 on intervention risks
The Japanese Yen sticks to its modest intraday recovery gains against a broadly weaker US Dollar on the back of speculations that authorities will step in to stem weakness in the domestic currency. In fact, Japanese officials stepped up intervention warnings and confirmed close coordination with the US against disorderly FX moves. This, in turn, triggered an intraday USD/JPY turnaround from the 157.65 region, or a two-week top, touched in reaction to Prime Minister Sanae Takaichi's landslide win in Sunday's election.
Editors’ Picks
EUR/USD holds firm near 1.1850 amid USD weakness
EUR/USD remains strongly bid around 1.1850 in European trading on Monday. The USD/JPY slide-led broad US Dollar weakness helps the pair build on Friday's recovery ahead of the Eurozone Sentix Investor Confidence data for February.
USD/JPY keeps the red below 157.00 on intervention risks
The Japanese Yen sticks to its modest intraday recovery gains against a broadly weaker US Dollar on the back of speculations that authorities will step in to stem weakness in the domestic currency. In fact, Japanese officials stepped up intervention warnings and confirmed close coordination with the US against disorderly FX moves. This, in turn, triggered an intraday USD/JPY turnaround from the 157.65 region, or a two-week top, touched in reaction to Prime Minister Sanae Takaichi's landslide win in Sunday's election.
Gold remains supported by China's buying and USD weakness as traders eye US data
Gold struggles to capitalize on its intraday move up and remains below the $5,100 mark heading into the European session amid mixed cues. Data released over the weekend showed that the People's Bank of China extended its buying spree for a 15th month in January. Moreover, dovish US Fed expectations and concerns about the central bank's independence drag the US Dollar lower for the second straight day, providing an additional boost to the non-yielding yellow metal.
Cardano steadies as whale selling caps recovery
Cardano (ADA) steadies at $0.27 at the time of writing on Monday after slipping more than 5% in the previous week. On-chain data indicate a bearish trend, with certain whales offloading ADA. However, the technical outlook suggests bearish momentum is weakening, raising the possibility of a short-term relief rebound if buying interest picks up.
Japanese PM Takaichi nabs unprecedented victory – US data eyed this week
I do not think I would be exaggerating to say that Japanese Prime Minister Sanae Takaichi’s snap general election gamble paid off over the weekend – and then some. This secured the Liberal Democratic Party (LDP) an unprecedented mandate just three months into her tenure.
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