Micro-wave

Robert Prechter’s Elliot Wave International is perhaps the most famous of contemporary wave theoricsts.
The main thrust is 3 impulse, 2 corrective waves.
The corrective phase against the main trend is the a-b-c wave; the one I call the microwave. It helps me keep clear what is the main direction we are going next. As a day trader, that [...]

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Grinder day

 The market opened near today’s low, chopped around, then made a steady climb to fill the 73+ gap. After a soft pullback on profit taking, the market continued to grind higher until the last half hour when traders took their profits.
The secret code traders were well rewarded today by staying true to their belief in the magic [...]

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See saw day

Today was a see saw day. Up and down in a range, with a few head fakes thrown in for good measure.
Find the basic range, and trade 80% of the middle is a reasonable strategy for conservative traders. This plan is for range trading. In the chart below you will see the ends as “tails” above [...]

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Deja vu

These wonderful lines are from the movie deja vu.
Doug Carlin: What if you had to tell someone the most important thing in the world, but you knew they’d never believe you?
Claire Kuchever: I’d try.
[last lines]
Claire Kuchever: What if you had to tell someone the most important thing in the world, but you knew they’d never [...]

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Eisenheim Day

 Eisenheim : Everything you have seen here has been an illusion.
Nothing is what it seems.
Monday’s misdirection play was a thing of beauty; even the great Eisenheim would have been applauding.
Traders were so busy looking through their rear view mirrors at the premarket high that they forgot to look at the cliff they were driving off.
After Friday’s [...]

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Range bound

In what many thought was going to be an option expiration ramp day up ended being a restrained day of measured pace.
You know the drill, summer Fridays at the office in August are for the recreationally impaired. The work is done early, then it’s party time. I hope you play by the same rules; life seems [...]

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75 and bulls are still alive

After the markets tested 75 at the open and held, it rallied to the psychology area. Profit taking ensued as the market pulled back to support in the afternoon.
Scalpers against the trend were finally right, but had to endure a number of stop outs first at a few logical areas.
Secret code traders had a big edge [...]

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Confuse us says: The long and short of option expiration

Option expiration is a study in volatility.
If you accept the premise that wall street insiders have an edge, then you are ahead of the game. The trick is to synchronize our mind with theirs, and stay one step ahead of the pack rather than always being a step behind.
If you also accept the premise that [...]

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The mathematics of motion

Funadmental traders look for reasons why; technical traders look for where and when.
Today’s narrow range finally broke in the afternoon, and the market ratcheted backward testing lower support. Emotional traders who do not understand the potential dynamics of expiration week were whipsawed.
Switching gears from range trading to a breakout mentality requires flexiility in our thinking. [...]

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Four realities of our choices

These are the four realities of our trading decisions:

We take a trade and we make money.
We take a trade and we lose money.
We don’t take a trade, and we don’t lose any money.
We don’t take a trade, but we lose the opportunity to make money.

These realities are an adaptation from the book Take the Risk through [...]

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