Boris Schlossberg
BKTraders and Prop Traders Edge
It doesn’t matter if you are Warren Buffett holding positions for decades or Ken Griffith holding them for milliseconds - there are only two ways to trade.
In trading you can either go with the price action - or in traders parlance trade “flow” or go against the price action or “fade” the move.
If you are going to day trade against trend need to know three things - what to trade, when to trade and how much profit to go for.
Here is a set up I trade every day in stock index futures. During the European open (around 4 am) stock futures usually make a session high or session low that is fadable for at least 20 points. And even if the trade doesn’t work the first time it usually resolves in profit on the second or the third attempt.
But trend! Trend is something different altogether. Trend or “flow” trading has a very specific tell that can give very accurate reads on the market.
Here is my proprietary bounce indicator in Flow mode. Notice anything? Flow trades which are bright green tiles on the chart tend to bunch together. Once a flow trade takes shape it tends to be followed by another.
So what does that mean to us as retail traders. Simple. We only take a flow trade if the prior trade hit the take profit. If the prior trade was a loss we STOP TRADING until flow turn profitable again. Using this stop and go method we avoid the dreaded “churn” and increase our chance of winning trades tremendously.
So here is the surprising takeaway for day trading. To trade counter trend you need to keep trying until you find the turn in the price action. But to trade trend you need stop and go stop and go until you sync yourself up with the trend move in the market.
That’s pretty much the opposite of what most traders do - but now you know!
Past performance is not indicative of future results. Trading forex carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade any such leveraged products, you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading on margin, and seek advice from an independent financial advisor if you have any doubts.
Editors’ Picks
EUR/USD stays defensive below 1.1900 as USD recovers
EUR/USD trades in negative territory for the third consecutive day, below 1.1900 in the European session on Thursday. A modest rebound in the US Dollar is weighing on the pair, despite an upbeat market mood. Traders keep an eye on the US weekly Initial Jobless Claims data for further trading impetus.
GBP/USD holds above 1.3600 after UK data dump
\GBP/USD moves little while holding above 1.3600 in the European session on Thursday, following the release of the UK Q4 preliminary GDP, which showed a 0.1% growth against a 0.2% increase expected. The UK industrial sector activity deteriorated in Decembert, keeping the downward pressure intact on the Pound Sterling.
Japanese Yen strengthens on renewed verbal intervention
USD/JPY extends its losses for the fourth successive session, trading around 152.90 during the Asian hours on Thursday. The pair weakens as the Japanese Yen strengthens following renewed verbal intervention from Tokyo.
Editors’ Picks
GBP/USD holds above 1.3600 after UK data dump
\GBP/USD moves little while holding above 1.3600 in the European session on Thursday, following the release of the UK Q4 preliminary GDP, which showed a 0.1% growth against a 0.2% increase expected. The UK industrial sector activity deteriorated in Decembert, keeping the downward pressure intact on the Pound Sterling.
EUR/USD stays defensive below 1.1900 as USD recovers
EUR/USD trades in negative territory for the third consecutive day, below 1.1900 in the European session on Thursday. A modest rebound in the US Dollar is weighing on the pair, despite an upbeat market mood. Traders keep an eye on the US weekly Initial Jobless Claims data for further trading impetus.
Gold sticks to modest intraday losses as reduced March Fed rate cut bets underpin USD
Gold languishes near the lower end of its daily range heading into the European session on Thursday. The precious metal, however, lacks follow-through selling amid mixed cues and currently trades above the $5,050 level, well within striking distance of a nearly two-week low touched the previous day.
Cardano eyes short-term rebound as derivatives sentiment improves
Cardano (ADA) is trading at $0.257 at the time of writing on Thursday, after slipping more than 4% so far this week. Derivatives sentiment improves as ADA’s funding rates turn positive alongside rising long bets among traders.
A tale of two labour markets: Headline strength masks underlying weakness
Undoubtedly, yesterday’s delayed US January jobs report delivered a strong headline – one that surpassed most estimates. However, optimism quickly faded amid sobering benchmark revisions.
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